This Just In: Analysts Are Boosting Their Silvergate Capital Corporation (NYSE:SI) Outlook for This Year

Celebrations may be in order for Silvergate Capital Corporation (NYSE:SI) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Silvergate Capital has also found favour with investors, with the stock up an unbelievable 41% to US$86.50 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Silvergate Capital's ten analysts is for revenues of US$364m in 2022 which - if met - would reflect a substantial 50% increase on its sales over the past 12 months. Per-share earnings are expected to leap 59% to US$5.14. Before this latest update, the analysts had been forecasting revenues of US$324m and earnings per share (EPS) of US$4.37 in 2022. 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.

View our latest analysis for Silvergate Capital

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$130, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Silvergate Capital, with the most bullish analyst valuing it at US$200 and the most bearish at US$77.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 clear from the latest estimates that Silvergate Capital's rate of growth is expected to accelerate meaningfully, with the forecast 124% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 38% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Silvergate Capital to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Silvergate Capital could be a good candidate for more research.

Analysts are definitely bullish on Silvergate Capital, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.