News Flash: Analysts Just Made A Notable Upgrade To Their The Bancorp, Inc. (NASDAQ:TBBK) Forecasts
Shareholders in The Bancorp, Inc. (NASDAQ:TBBK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 14% to US$32.71 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the latest consensus from Bancorp's three analysts is for revenues of US$372m in 2023, which would reflect a credible 7.1% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 43% to US$3.33. Previously, the analysts had been modelling revenues of US$319m and earnings per share (EPS) of US$3.22 in 2023. The forecasts seem more optimistic now, with a solid increase in revenue and a modest lift to earnings per share estimates.
Check out our latest analysis for Bancorp
It will come as no surprise to learn that the analysts have increased their price target for Bancorp 15% to US$40.33 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Bancorp analyst has a price target of US$43.00 per share, while the most pessimistic values it at US$38.00. This is a very narrow spread of estimates, implying either that Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 7.1% growth on an annualised basis. That is in line with its 8.6% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.5% per year. It's clear that while Bancorp's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Bancorp.
Better yet, our automated discounted cash flow calculation (DCF) suggests Bancorp could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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