Pinnacle Financial Partners Inc’s (NASDAQ:PNFP) Earnings Grew 36.75% In A Year. Was It Better Than Its Long-Term Trend?
Today I will examine Pinnacle Financial Partners Inc’s (NASDAQ:PNFP) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of PNFP’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Pinnacle Financial Partners
Were PNFP’s earnings stronger than its past performances and the industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess many different companies in a uniform manner using the latest information. For Pinnacle Financial Partners, its most recent trailing-twelve-month earnings is $174.0M, which, relative to the prior year’s figure, has climbed up by 36.75%. Since these values are fairly short-term thinking, I have estimated an annualized five-year figure for PNFP’s net income, which stands at $76.0M. This suggests that, on average, Pinnacle Financial Partners has been able to increasingly raise its net income over the last few years as well.
What’s the driver of this growth? Let’s see whether it is merely attributable to an industry uplift, or if Pinnacle Financial Partners has experienced some company-specific growth. In the past few years, Pinnacle Financial Partners expanded its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 7.88% in the previous year, and 8.55% over the past half a decade. This means whatever uplift the industry is deriving benefit from, Pinnacle Financial Partners is able to amplify this to its advantage.
What does this mean?
Though Pinnacle Financial Partners’s past data is helpful, it is only one aspect of my investment thesis. While Pinnacle Financial Partners has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Pinnacle Financial Partners to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PNFP’s future growth? Take a look at our free research report of analyst consensus for PNFP’s outlook.
2. Financial Health: Is PNFP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
