Results: Business First Bancshares, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Business First Bancshares, Inc. (NASDAQ:BFST) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$41m, some 6.4% above estimates, and statutory earnings per share (EPS) coming in at US$0.46, 38% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Business First Bancshares
Taking into account the latest results, the consensus forecast from Business First Bancshares' five analysts is for revenues of US$157.4m in 2021, which would reflect a huge 39% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 57% to US$1.67. In the lead-up to this report, the analysts had been modelling revenues of US$153.6m and earnings per share (EPS) of US$1.63 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for Business First Bancshares 5.4% to US$17.13on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Business First Bancshares, with the most bullish analyst valuing it at US$18.50 and the most bearish at US$15.50 per share. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Business First Bancshares' rate of growth is expected to accelerate meaningfully, with the forecast 39% revenue growth noticeably faster than its historical growth of 24%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.4% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Business First Bancshares 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 Business First Bancshares following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Business First Bancshares analysts - going out to 2022, and you can see them free on our platform here.
Even so, be aware that Business First Bancshares is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
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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