Need To Know: Analysts Are Much More Bullish On MetroCity Bankshares, Inc. (NASDAQ:MCBS)

Celebrations may be in order for MetroCity Bankshares, Inc. (NASDAQ:MCBS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on MetroCity Bankshares too, with the stock up 12% to US$16.16 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for MetroCity Bankshares from its three analysts is for revenues of US$122m in 2021 which, if met, would be a huge 28% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 39% to US$2.15. Before this latest update, the analysts had been forecasting revenues of US$110m and earnings per share (EPS) of US$1.78 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for MetroCity Bankshares

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$18.25, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 MetroCity Bankshares, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$16.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting MetroCity Bankshares is an easy business to forecast or the underlying assumptions are obvious.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MetroCity Bankshares' past performance and to peers in the same industry. The analysts are definitely expecting MetroCity Bankshares' growth to accelerate, with the forecast 39% annualised growth to the end of 2021 ranking favourably alongside historical growth of 12% per annum 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 3.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that MetroCity Bankshares is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at MetroCity Bankshares.

Still, 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..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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