Market forces rained on the parade of Allegiance Bancshares, Inc. (NASDAQ:ABTX) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the downgrade, the most recent consensus for Allegiance Bancshares from its three analysts is for revenues of US$245m in 2022 which, if met, would be a credible 2.0% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$315m of revenue in 2022. The consensus view seems to have become more pessimistic on Allegiance Bancshares, noting the sizeable cut to revenue estimates in this update.
View our latest analysis for Allegiance Bancshares
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Allegiance Bancshares' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Allegiance Bancshares' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Allegiance Bancshares.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Allegiance Bancshares going forwards.
Unsatisfied? At least one of Allegiance Bancshares' three analysts has provided estimates out to 2023, which can be seen for 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.