US$87.75 - That's What Analysts Think Preferred Bank (NASDAQ:PFBC) Is Worth After These Results

Preferred Bank (NASDAQ:PFBC) just released its latest first-quarter results and things are looking bullish. The company beat expectations with revenues of US$72m arriving 3.1% ahead of forecasts. Statutory earnings per share (EPS) were US$2.44, 2.4% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Preferred Bank

Taking into account the latest results, Preferred Bank's five analysts currently expect revenues in 2024 to be US$283.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to fall 11% to US$9.69 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$274.6m and earnings per share (EPS) of US$9.39 in 2024. 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.

It will come as no surprise to learn that the analysts have increased their price target for Preferred Bank 6.4% to US$87.75on the back of these upgrades. 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 Preferred Bank at US$91.00 per share, while the most bearish prices it at US$84.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Preferred Bank's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.9% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% 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 Preferred Bank.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Preferred Bank's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Preferred Bank going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Preferred Bank has 2 warning signs (and 1 which is a bit concerning) we think you should know about.

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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.