Results: West Bancorporation, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that West Bancorporation, Inc. (NASDAQ:WTBA) released its first-quarter result to the market. The early response was not positive, with shares down 2.7% to US$25.00 in the past week. It looks like a credible result overall - although revenues of US$27m were in line with what the analyst predicted, West Bancorporation surprised by delivering a statutory profit of US$0.78 per share, a notable 11% above expectations. The analyst 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 analyst has changed their earnings models, following these results.

Check out our latest analysis for West Bancorporation

After the latest results, the consensus from West Bancorporation's lone analyst is for revenues of US$105.7m in 2022, which would reflect a measurable 2.3% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to shrink 8.5% to US$2.82 in the same period. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$106.6m and earnings per share (EPS) of US$2.69 in 2022. The analyst seem to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target fell 6.7% to US$28.00, suggesting the increase in earnings forecasts was not enough to offset other the analyst concerns.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 3.0% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 9.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - West Bancorporation is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards West Bancorporation following these results. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that West Bancorporation's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of West Bancorporation's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for West Bancorporation 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.