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Investors in Southern California Bancorp (NASDAQ:BCAL) had a good week, as its shares rose 4.4% to close at US$15.79 following the release of its quarterly results. Statutory earnings per share fell badly short of expectations, coming in at US$0.01, some 96% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$22m. 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 Southern California Bancorp
Taking into account the latest results, the most recent consensus for Southern California Bancorp from dual analysts is for revenues of US$130.5m in 2024. If met, it would imply a major 49% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plunge 37% to US$0.55 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$137.4m and earnings per share (EPS) of US$0.45 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a considerable lift to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The consensus price target fell 8.8% to US$18.25, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Southern California Bancorp's past performance and to peers in the same industry. It's clear from the latest estimates that Southern California Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 123% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 25% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Southern California Bancorp to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Southern California Bancorp's earnings potential next year. They also downgraded Southern California Bancorp's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Southern California Bancorp's future valuation.