Analysts Are More Bearish On First Internet Bancorp (NASDAQ:INBK) Than They Used To Be

One thing we could say about the analysts on First Internet Bancorp (NASDAQ:INBK) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from four analysts covering First Internet Bancorp is for revenues of US$96m in 2023, implying a sizeable 21% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 50% to US$2.24 in the same period. Prior to this update, the analysts had been forecasting revenues of US$120m and earnings per share (EPS) of US$4.96 in 2023. Indeed, we can see that the analysts are a lot more bearish about First Internet Bancorp's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for First Internet Bancorp

It'll come as no surprise then, to learn that the analysts have cut their price target 34% to US$29.60. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values First Internet Bancorp at US$36.00 per share, while the most bearish prices it at US$27.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 17% 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 6.5% annually for the foreseeable future. It's pretty clear that First Internet Bancorp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for First Internet Bancorp. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that First Internet Bancorp's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple First Internet Bancorp analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.