Celebrations may be in order for First Choice Bancorp (NASDAQ:FCBP) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
After this upgrade, First Choice Bancorp's solitary analyst is now forecasting revenues of US$96m in 2021. This would be a solid 19% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 24% to US$2.57. Previously, the analyst had been modelling revenues of US$74m and earnings per share (EPS) of US$1.72 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
It will come as no surprise to learn that the analyst has increased their price target for First Choice Bancorp 42% to US$25.50 on the back of these upgrades.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the First Choice Bancorp's past performance and to peers in the same industry. We would highlight that First Choice Bancorp's revenue growth is expected to slow, with forecast 19% increase next year well below the historical 26% 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) 1.4% next year. So it's pretty clear that, while First Choice Bancorp's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at First Choice Bancorp.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
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.
This article by Simply Wall St is general in nature. 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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