Earnings Miss: First Bank Missed EPS By 5.3% And Analysts Are Revising Their Forecasts

The analyst might have been a bit too bullish on First Bank (NASDAQ:FRBA), given that the company fell short of expectations when it released its quarterly results last week. First Bank missed analyst forecasts, with revenues of US$24m and statutory earnings per share (EPS) of US$0.36, falling short by 2.6% and 5.3% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for First Bank

Taking into account the latest results, the current consensus from First Bank's lone analyst is for revenues of US$122.6m in 2023, which would reflect a major 28% increase on its sales over the past 12 months. Statutory earnings per share are forecast to nosedive 44% to US$1.01 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$126.7m and earnings per share (EPS) of US$1.41 in 2023. The analyst seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 20% to US$12.00, with the weaker earnings outlook clearly leading valuation estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that First Bank's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 15% 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 3.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that First Bank is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for First Bank. They also downgraded their revenue estimates, although industry data suggests that First Bank's revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of First Bank's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Even so, be aware that First Bank is showing 1 warning sign in our investment analysis , 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.