Yahoo Finance West Bancorporation, Inc. Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next
Last week, you might have seen that West Bancorporation, Inc. (NASDAQ:WTBA) released its quarterly 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. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on West Bancorporation after the latest results.
Check out our latest analysis for West Bancorporation
Following the recent earnings report, the consensus from sole analyst covering West Bancorporation is for revenues of US$105.7m in 2022, implying a small 2.3% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to shrink 8.5% to US$2.82 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$106.6m and earnings per share (EPS) of US$2.69 in 2022. So the consensus seems to have become somewhat more optimistic on West Bancorporation's earnings potential following these results.
The average the analyst price target fell 6.7% to US$28.00, suggesting thatthe analyst has other concerns, and the improved earnings per share outlook was not enough to allay them.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.6% annually for the foreseeable future. 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
You still need to take note of risks, for example - West Bancorporation has 1 warning sign we think you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
