Time To Worry? Analysts Are Downgrading Their Coastal Financial Corporation (NASDAQ:CCB) Outlook
The analysts covering Coastal Financial Corporation (NASDAQ:CCB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After this downgrade, Coastal Financial's three analysts are now forecasting revenues of US$563m in 2024. This would be a substantial 116% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 25% to US$4.57. Before this latest update, the analysts had been forecasting revenues of US$628m and earnings per share (EPS) of US$5.53 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.
Check out our latest analysis for Coastal Financial
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 clear from the latest estimates that Coastal Financial's rate of growth is expected to accelerate meaningfully, with the forecast 85% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 44% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Coastal Financial is expected to grow much faster than its industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Coastal Financial. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Coastal Financial, and their negativity could be grounds for caution.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Coastal Financial analysts - going out to 2025, and you can see them 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
