Earnings Miss: Level One Bancorp, Inc. Missed EPS By 5.1% And Analysts Are Revising Their Forecasts

As you might know, Level One Bancorp, Inc. (NASDAQ:LEVL) recently reported its quarterly numbers. It looks like the results were a bit of a negative overall. While revenues of US$17m were in line with analyst predictions, earnings were less than expected, missing estimates by 5.1% to hit US$0.56 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see whether the latest forecasts would suggest a change of heart on the company. With this in mind, we’ve gathered the latest forecasts to see what analysts are expecting for next year.

Check out our latest analysis for Level One Bancorp

NasdaqGS:LEVL Past and Future Earnings, November 1st 2019
NasdaqGS:LEVL Past and Future Earnings, November 1st 2019

Following the latest results, Level One Bancorp’s three analysts are now forecasting revenues of US$78m in 2020. This would be a sizeable 26% improvement in sales compared to the last 12 months. Earnings per share are expected to bounce 24% to US$2.47. Yet prior to the latest earnings, analysts had been forecasting revenues of US$78m and earnings per share (EPS) of US$2.48 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$27.13. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Level One Bancorp at US$28.00 per share, while the most bearish prices it at US$25.50. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It’s clear from the latest estimates that Level One Bancorp’s rate of growth is expected to accelerate meaningfully, with forecast 26% revenue growth noticeably faster than its historical growth of 13%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 2.2% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Level One Bancorp is expected to grow much faster than its market.

The Bottom Line

The most obvious conclusion from these results is that there’s been no major change in the business’ prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – and our data does suggest that Level One Bancorp’s revenues are expected to grow faster than the wider market. The consensus price target held steady at US$27.13, with the latest estimates not enough to have an impact on analysts’ estimated valuations.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Level One Bancorp analysts – going out to 2021, and you can see them free on our platform here.

You can also see whether Level One Bancorp is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.