Q4 Earnings Preview for ServisFirst (SFBS): Trading at 2.4x Price/Book

in EARNINGS/INVESTING IDEAS by

ServisFirst Bancshares, Inc. (NASDAQGS:SFBS) is scheduled to report Q4 earnings results on January 21, 2020. The company plans to make the release available at http://www.servisfirstbancshares.com on the 21st at 4 p.m. ET.

The company is expected to report earnings of $0.68/share on revenue of $80.338 million after markets close for trading. The consensus earnings per share (EPS) of $0.68/share is based on a poll of 4 analysts and represents a growth of 1.5% over the same quarter last year when the company reported earnings of $0.67/share.

The revenue forecast of $80.338 million based on a poll of 4 analysts implies a year-over-year (YoY) growth of 10.8%. Last year the company reported $72.475 million in revenue for the quarter.

Expected to report EPS growth of $0.01/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $80.34 $72.47 10.8%
EPS $0.68 $0.67 1.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters. What are your expectations from ServisFirst for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.66 $0.67 1.5% Beat
Q2, 2019 $0.65 $0.66 2.3% Beat
Q1, 2019 $0.64 $0.65 1.6% Beat
Q4, 2018 $0.68 $0.67 -1.5% Missed
Q3, 2018 $0.62 $0.64 3.2% Beat
Q2, 2018 $0.58 $0.62 6.0% Beat
Q1, 2018 $0.58 $0.60 3.4% Beat
Q4, 2017 $0.48 $0.45 -6.2% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

After the last earnings report for the period ending September 30, 2019, the stock price reacted by increasing by 5.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-21 $33.50 $35.32 5.4% Increase
2019-07-15 $33.70 $32.41 -3.8% Decline
2019-04-15 $35.36 $34.49 -2.5% Decline
2019-01-22 $34.75 $34.09 -1.9% Decline

Fundamentals And Technical Analysis

ServisFirst is currently trading at $36.95/share, down -0.5% for the day. The company is trading at approximately 95.8% of its 52-week high of $38.56/share. The company’s stock price is up 4.6% since the last earnings report and up 0.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 50.22 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:SFBS Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 13.7x and a forward P/E multiple of 13.8x. ServisFirst’s current share price also implies a price-to-book (P/B) multiple of 2.4x. The following table summarizes some other key fundamental ratios:

Data as of January 20, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $36.95
P/E Ratio 13.7x
P/E Ratio (Fwd) 13.8x
PEG Ratio 7.1
Total Debt to Capital (%) 18.4%
Levered Free Cash Flow $152.8 million
Market Capitalization $1.98 billion

Source: Finbox

Company Profile: ServisFirst Bancshares, Inc.

ServisFirst Bancshares, Inc. is a small-cap stock with a market capitalization of $1.98 billion. The company operates in the Financial sector and the Banks industry.

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides banking services to individuals and corporate customers in the United States. It offers demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit.

The company also provides commercial lending products, such as seasonal loans, bridge loans, and term loans for working capital, expansion of the business, or acquisition of property, plant, and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. In addition, it offers other banking products and services comprising telephone and mobile banking, direct deposit, Internet banking, traveler’s checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit card systems, as well as Visa credit cards; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions.

Further, the company, through its subsidiary, SF Intermediate Holding Company, Inc., operates as a real estate investment trust for the United States income tax purposes; and holds and manages participation in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. It operates 20 full-service banking offices located in Jefferson, Shelby, Madison, Montgomery, Mobile, Baldwin, and Houston Counties in Alabama; Escambia and Hillsborough Counties in Florida; Cobb and Douglas Counties in Georgia; Charleston County in South Carolina; and Davidson County in Tennessee.

The company was founded in 2005 and is headquartered in Birmingham, Alabama.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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