Earnings Miss: Community West Bancshares Missed EPS By 46% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Community West Bancshares (NASDAQ:CWBC) released its quarterly result to the market. The early response was not positive, with shares down 2.7% to US$18.57 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$33m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 46% to hit US$0.18 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Community West Bancshares

Following the latest results, Community West Bancshares' five analysts are now forecasting revenues of US$143.2m in 2025. This would be a sizeable 51% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 494% to US$2.09. Before this earnings report, the analysts had been forecasting revenues of US$143.7m and earnings per share (EPS) of US$2.16 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$22.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Community West Bancshares at US$24.00 per share, while the most bearish prices it at US$21.00. This is a very narrow spread of estimates, implying either that Community West Bancshares is an easy company to value, or - more likely - the analysts are relying heavily on some key 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. The analysts are definitely expecting Community West Bancshares' growth to accelerate, with the forecast 39% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.3% per annum 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 6.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Community West Bancshares is expected to grow much faster than its 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$22.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Community West Bancshares going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Community West Bancshares (of which 1 can't be ignored!) 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.