For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on CenterState Bank Corporation (NASDAQ:CSFL) useful as an attempt to give more color around how CenterState Bank is currently performing. View our latest analysis for CenterState Bank
How CSFL fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 examine many different companies on a more comparable basis, using the most relevant data points. For CenterState Bank, its most recent earnings (trailing twelve month) is $69.7M, which, relative to last year’s figure, has moved up by a substantial 90.76%. Since these values are fairly short-term, I have calculated an annualized five-year value for CSFL’s net income, which stands at $21.7M. This means on average, CenterState Bank has been able to increasingly raise its earnings over the last few years as well.
What’s enabled this growth? Let’s take a look at whether it is solely because of industry tailwinds, or if CenterState Bank has seen some company-specific growth. In the last couple of years, CenterState Bank expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the US banks industry has been growing, albeit, at a muted single-digit rate of 9.74% over the previous year, and 8.52% over the past five. This means any tailwind the industry is gaining from, CenterState Bank is capable of leveraging this to its advantage.
What does this mean?
CenterState Bank’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as CenterState Bank gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research CenterState Bank to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CSFL’s future growth? Take a look at our free research report of analyst consensus for CSFL’s outlook.
2. Financial Health: Is CSFL’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 30 September 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.