Where Plumas Bancorp (PLBC) Stands In Terms Of Earnings Growth Against Its Industry
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Plumas Bancorp (NASDAQ:PLBC) useful as an attempt to give more color around how Plumas Bancorp is currently performing. View our latest analysis for Plumas Bancorp
How PLBC fared against its long-term earnings performance and its industry
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine various companies in a uniform manner using the latest information. For Plumas Bancorp, the most recent twelve-month earnings is $9M, which, in comparison to last year’s figure, has risen by 30.58%. Given that these figures may be relatively myopic, I have calculated an annualized five-year figure for PLBC’s net income, which stands at $4M. This means generally, Plumas Bancorp has been able to gradually improve its net income over the past few years as well.
How has it been able to do this? Well, let’s take a look at whether it is merely because of industry tailwinds, or if Plumas Bancorp has experienced some company-specific growth. In the last few years, Plumas Bancorp increased its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 12.54% over the previous twelve months, and a less exciting 9.71% over the previous few years. This means that any tailwind the industry is benefiting from, Plumas Bancorp is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Plumas Bancorp has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Plumas Bancorp to get a more holistic view of the stock by looking at:
1. Financial Health: Is PLBC’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.
2. Valuation: What is PLBC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether PLBC is currently mispriced by the market.
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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.
