Cathay General Bancorp Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week saw the newest quarterly earnings release from Cathay General Bancorp (NASDAQ:CATY), an important milestone in the company's journey to build a stronger business. Revenues came in 6.6% below expectations, at US$175m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.98 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cathay General Bancorp after the latest results.

View our latest analysis for Cathay General Bancorp

Taking into account the latest results, the current consensus, from the six analysts covering Cathay General Bancorp, is for revenues of US$729.8m in 2024. This implies a small 3.8% reduction in Cathay General Bancorp's revenue over the past 12 months. Statutory earnings per share are expected to sink 15% to US$3.83 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$759.2m and earnings per share (EPS) of US$4.02 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the US$39.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Cathay General Bancorp, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$34.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Cathay General Bancorp is an easy business to forecast or the the analysts are all using similar assumptions.

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. We would highlight that revenue is expected to reverse, with a forecast 5.1% annualised decline to the end of 2024. That is a notable change from historical growth of 7.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.0% annually for the foreseeable future. It's pretty clear that Cathay General Bancorp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$39.50, 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. At Simply Wall St, we have a full range of analyst estimates for Cathay General Bancorp going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - Cathay General Bancorp has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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.