Stock Analysis

Does Citizens Community Bancorp (NASDAQ:CZWI) Deserve A Spot On Your Watchlist?

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NasdaqGM:CZWI
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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

In contrast to all that, I prefer to spend time on companies like Citizens Community Bancorp (NASDAQ:CZWI), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Citizens Community Bancorp

How Quickly Is Citizens Community Bancorp Increasing Earnings Per Share?

As one of my mentors once told me, share price follows earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. Impressively, Citizens Community Bancorp has grown EPS by 29% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be smiling.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. I note that Citizens Community Bancorp's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. Citizens Community Bancorp maintained stable EBIT margins over the last year, all while growing revenue 11% to US$61m. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

earnings-and-revenue-history
NasdaqGM:CZWI Earnings and Revenue History March 31st 2021

Fortunately, we've got access to analyst forecasts of Citizens Community Bancorp's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Citizens Community Bancorp Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

It's good to see Citizens Community Bancorp insiders walking the walk, by spending US$335k on shares in just twelve months. When you contrast that with the complete lack of sales, it's easy for shareholders to brim with joyful expectancy. It is also worth noting that it was Independent Director James Lang who made the biggest single purchase, worth US$22k, paying US$10.98 per share.

Does Citizens Community Bancorp Deserve A Spot On Your Watchlist?

For growth investors like me, Citizens Community Bancorp's raw rate of earnings growth is a beacon in the night. Not only is that growth rate rather juicy, but the insider buying makes my mouth water. To put it succinctly; Citizens Community Bancorp is a strong candidate for your watchlist. Still, you should learn about the 2 warning signs we've spotted with Citizens Community Bancorp (including 1 which shouldn't be ignored) .

As a growth investor I do like to see insider buying. But Citizens Community Bancorp isn't the only one. You can see a a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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What are the risks and opportunities for Citizens Community Bancorp?

Citizens Community Bancorp, Inc. operates as a bank holding company for Citizens Community Federal N.A.

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Rewards

  • Trading at 41.6% below our estimate of its fair value

Risks

  • Earnings are forecast to decline by an average of 8% per year for the next 3 years

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Citizens Community Bancorp

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