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As you might know, Live Oak Bancshares, Inc. (NASDAQ:LOB) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$110m. Live Oak Bancshares reported statutory earnings per share (EPS) US$0.76, which was a notable 11% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Live Oak Bancshares
Taking into account the latest results, the most recent consensus for Live Oak Bancshares from five analysts is for revenues of US$483.0m in 2022 which, if met, would be an okay 7.7% increase on its sales over the past 12 months. Per-share earnings are expected to surge 43% to US$5.28. Before this earnings report, the analysts had been forecasting revenues of US$449.5m and earnings per share (EPS) of US$3.35 in 2022. So it seems there's been a definite increase in optimism about Live Oak Bancshares' future following the latest results, with a considerable lift to the earnings per share forecasts in particular.
Despite these upgrades, the consensus price target fell 19% to US$57.40, perhaps signalling that the uplift in performance is not expected to last. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Live Oak Bancshares, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$51.00 per share. This is a very narrow spread of estimates, implying either that Live Oak Bancshares is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 pretty clear that there is an expectation that Live Oak Bancshares' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.6% per year. So it's pretty clear that, while Live Oak Bancshares' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.