As you might know, Hope Bancorp, Inc. (NASDAQ:HOPE) just kicked off its latest third-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$135m, some 4.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.25, 29% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the six analysts covering Hope Bancorp are now predicting revenues of US$539.1m in 2021. If met, this would reflect a sizeable 21% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dip 2.5% to US$0.99 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$530.1m and earnings per share (EPS) of US$0.98 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$9.10, suggesting that the company has met expectations in its recent result. 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. The most optimistic Hope Bancorp analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$8.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Hope Bancorp is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Hope Bancorp's growth to accelerate, with the forecast 21% growth ranking favourably alongside historical growth of 8.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hope Bancorp is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Hope Bancorp going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Hope Bancorp .
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