Results: Sierra Bancorp Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Sierra Bancorp (NASDAQ:BSRR) had a good week, as its shares rose 9.1% to close at US$17.79 following the release of its first-quarter results. The result was positive overall - although revenues of US$30m were in line with what the analysts predicted, Sierra Bancorp surprised by delivering a statutory profit of US$0.51 per share, modestly greater than expected. 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.

Check out our latest analysis for Sierra Bancorp

After the latest results, the six analysts covering Sierra Bancorp are now predicting revenues of US$124.0m in 2020. If met, this would reflect a modest 6.2% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to tumble 22% to US$1.77 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$117.6m and earnings per share (EPS) of US$1.72 in 2020. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of US$19.25, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Sierra Bancorp analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$17.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Sierra Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 6.2%, compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.9% next year. Even after the forecast slowdown in growth, it seems obvious that Sierra Bancorp is also expected 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 Sierra Bancorp following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$19.25, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sierra Bancorp going out to 2021, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Sierra Bancorp (1 makes us a bit uncomfortable!) that you should be aware of.

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.

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