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The quarterly results for OP Bancorp (NASDAQ:OPBK) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of US$13m were in line with what the analysts predicted, OP Bancorp surprised by delivering a statutory profit of US$0.21 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, OP Bancorp's two analysts are now forecasting revenues of US$53.7m in 2020. This would be a modest 3.8% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to tumble 27% to US$0.69 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$53.7m and earnings per share (EPS) of US$0.69 in 2020. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With no major changes to earnings forecasts, the consensus price target fell 26% to US$8.50, suggesting that the analysts might have previously been hoping for an earnings upgrade.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that OP Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 3.8%, compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.07% next year. Even after the forecast slowdown in growth, it seems obvious that OP Bancorp is also expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for OP Bancorp going out as far as 2021, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for OP Bancorp (1 is concerning!) that we have uncovered.
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