Investors in Great Southern Bancorp, Inc. (NASDAQ:GSBC) had a good week, as its shares rose 6.9% to close at US$41.74 following the release of its quarterly results. Revenues were US$54m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.96, an impressive 28% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Great Southern Bancorp's three analysts are now forecasting revenues of US$202.8m in 2021. This would be a modest 4.2% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plummet 24% to US$3.19 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$203.4m and earnings per share (EPS) of US$2.78 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.3% to US$46.33. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Great Southern Bancorp analyst has a price target of US$51.00 per share, while the most pessimistic values it at US$44.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. It's clear from the latest estimates that Great Southern Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 4.2% revenue growth noticeably faster than its historical growth of 1.1%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Great Southern Bancorp is expected to grow much 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 Great Southern Bancorp following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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.
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. We have forecasts for Great Southern Bancorp going out to 2022, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Great Southern Bancorp , and understanding this should be part of your investment process.
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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