Bank7 Corp. (NASDAQ:BSVN) just released its latest first-quarter results and things are looking bullish. Bank7 delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$12m, some 13% above indicated. Statutory EPS were US$0.51, an impressive 37% ahead of forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Bank7's three analysts is for revenues of US$47.2m in 2020, which would reflect a credible 7.2% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 98% to US$1.60. In the lead-up to this report, the analysts had been modelling revenues of US$40.1m and earnings per share (EPS) of US$1.22 in 2020. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
As a result, it might be a surprise to see thatthe analysts have cut their price target 45% to US$12.33, which could suggest the forecast improvement in performance is not expected to last. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Bank7 analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$11.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. Next year brings more of the same, according to the analysts, with revenue forecast to grow 7.2%, in line with its 6.6% annual growth over the past year. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.8% next year. So although Bank7 is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Bank7 following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Bank7's future valuation.
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 forecasts for Bank7 going out to 2021, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 4 warning signs for Bank7 you should be aware of.
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