As you might know, Investar Holding Corporation (NASDAQ:ISTR) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 8.8% to hit US$21m. Investar Holding also reported a statutory profit of US$0.39, which was an impressive 77% above what the analysts had forecast. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Investar Holding
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Taking into account the latest results, the current consensus from Investar Holding’s four analysts is for revenues of US$81.5m in 2020, which would reflect a solid 17% increase on its sales over the past 12 months. Statutory earnings per share are forecast to descend 20% to US$0.98 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$79.0m and earnings per share (EPS) of US$0.86 in 2020. So it seems there’s been a definite increase in optimism about Investar Holding’s future following the latest results, with a solid gain to the earnings per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of US$16.69, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values Investar Holding at US$18.00 per share, while the most bearish prices it at US$15.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Investar Holding is an easy business to forecast or the the analysts are all using similar assumptions.
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. We can infer from the latest estimates that forecasts expect a continuation of Investar Holding’shistorical trends, as next year’s 17% revenue growth is roughly in line with 16% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.0% next year. So it’s pretty clear that Investar Holding is forecast to grow substantially faster than its 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 Investar Holding following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$16.69, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Investar Holding. Long-term earnings power is much more important than next year’s profits. We have forecasts for Investar Holding going out to 2021, and you can see them free on our platform here.
We don’t want to rain on the parade too much, but we did also find 2 warning signs for Investar Holding that you need to be mindful of.
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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