FS Bancorp, Inc. (NASDAQ:FSBW) investors will be delighted, with the company turning in some strong numbers with its latest results. Statutory revenue and earnings both blasted past expectations, with revenue of US$36m beating expectations by 32% and earnings per share (EPS) reaching US$2.94, some 69% ahead of expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, FS Bancorp's three analysts are forecasting 2021 revenues to be US$103.9m, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 34% to US$5.14 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$102.3m and earnings per share (EPS) of US$4.52 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.
The consensus price target rose 24% to US$56.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on FS Bancorp, with the most bullish analyst valuing it at US$65.00 and the most bearish at US$50.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FS Bancorp's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 1.8% revenue decline a notable change from historical growth of 17% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 6.9% next year. The forecasts do look comparatively optimistic for FS Bancorp, since they're expecting it to shrink slower than the 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 FS Bancorp following these results. Fortunately, they also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations. Their estimates also suggest that FS Bancorp's revenues are expected to perform better than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on FS Bancorp. Long-term earnings power is much more important than next year's profits. We have forecasts for FS Bancorp going out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for FS Bancorp (1 is a bit unpleasant!) that we have uncovered.
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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