Earnings Update: Here's Why Analysts Just Lifted Their MetroCity Bankshares, Inc. (NASDAQ:MCBS) Price Target To US$17.50

The full-year results for MetroCity Bankshares, Inc. (NASDAQ:MCBS) were released last week, making it a good time to revisit its performance. Revenues came in 2.2% below expectations, at US$90m. Statutory earnings per share were relatively better off, with a per-share profit of US$1.41 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for MetroCity Bankshares

Taking into account the latest results, the current consensus from MetroCity Bankshares' three analysts is for revenues of US$102.0m in 2021, which would reflect a solid 14% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 7.0% to US$1.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$99.8m and earnings per share (EPS) of US$1.44 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.1% to US$17.50per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values MetroCity Bankshares at US$19.00 per share, while the most bearish prices it at US$16.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 14%, in line with its 14% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.3% per year. So although MetroCity Bankshares is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards MetroCity Bankshares following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Simply Wall St, we have a full range of analyst estimates for MetroCity Bankshares going out to 2022, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for MetroCity Bankshares you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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