Middlefield Banc Corp. Just Missed Earnings - But Analysts Have Updated Their Models

Middlefield Banc Corp. (NASDAQ:MBCN) just released its latest third-quarter report and things are not looking great. Middlefield Banc missed earnings this time around, with US$18m revenue coming in 2.8% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.47 also fell short of expectations by 19%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Middlefield Banc

After the latest results, the four analysts covering Middlefield Banc are now predicting revenues of US$72.0m in 2024. If met, this would reflect a satisfactory 4.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to descend 11% to US$1.91 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$72.9m and earnings per share (EPS) of US$2.04 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 5.2% to US$27.50, with the analysts clearly linking lower forecast earnings to the performance of the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Middlefield Banc, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$27.00 per share. This is a very narrow spread of estimates, implying either that Middlefield Banc is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. We would highlight that Middlefield Banc's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2024 being well below the historical 9.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Middlefield Banc.

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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Middlefield Banc's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Middlefield Banc'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. We have estimates - from multiple Middlefield Banc analysts - going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Middlefield Banc (1 doesn't sit too well with us!) that you need to take into consideration.

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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.