Shareholders in Preferred Bank (NASDAQ:PFBC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After this upgrade, Preferred Bank's five analysts are now forecasting revenues of US$176m in 2020. This would be a credible 6.8% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to drop 17% to US$4.17 in the same period. Previously, the analysts had been modelling revenues of US$158m and earnings per share (EPS) of US$3.96 in 2020. The most recent forecasts are noticeably more optimistic, with a decent improvement in revenue estimates and a lift to earnings per share as well.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Preferred Bank's revenue growth is expected to slow, with forecast 6.8% increase next year well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.8% next year. Even after the forecast slowdown in growth, it seems obvious that Preferred Bank is also expected to grow faster than the wider industry.
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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Preferred Bank.
Analysts are clearly in love with Preferred Bank at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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