Cathay General (CATY) Q4 2019 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Cathay General Bancorp (NASDAQGS:CATY) is scheduled to report Q4 earnings results on January 22, 2020. The webcast details can be found here.

The company is expected to report earnings of $0.83/share on revenue of $153 million. The consensus earnings per share (EPS) of $0.83/share is based on a poll of 5 analysts and represents a growth of 3.7% over the same quarter last year when the company reported earnings of $0.80/share.

The revenue forecast of $153 million based on a poll of 5 analysts implies a year-over-year (YoY) decline of -1.8%. Last year the company reported $155.9 million in revenue for the quarter.

Expected to report EPS growth of $0.03/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $153.00 $155.88 -1.8%
EPS $0.83 $0.80 3.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 2 quarters.

What are your expectations from Cathay General for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.89 $0.91 2.2% Beat
Q2, 2019 $0.88 $0.90 2.3% Beat
Q1, 2019 $0.80 $0.83 3.7% Beat
Q4, 2018 $0.80 $0.80 0.0% Meet
Q3, 2018 $0.85 $0.83 -1.8% Missed
Q2, 2018 $0.90 $0.90 0.6% Beat
Q1, 2018 $0.78 $0.78 0.0% Meet
Q4, 2017 $0.63 $0.60 -4.0% 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 1.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-16 $34.97 $35.36 1.1% Increase
2019-07-17 $34.80 $35.96 3.3% Increase
2019-04-17 $36.22 $35.57 -1.8% Decline
2019-01-23 $37.16 $37.17 0.0% Increase

Fundamentals And Technical Analysis

Cathay General is currently trading at $37.46/share, down -1.1% for the day. The company is trading at approximately 93.5% of its 52-week high of $40.06/share. The company’s stock price is up 6.0% since the last earnings report and down -0.1% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 57.22 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:CATY Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 10.9x and a forward P/E multiple of 11.1x.

Cathay General’s current share price also implies a price-to-book (P/B) multiple of 1.3x. The following table summarizes some other key fundamental ratios:

Data as of January 21, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $37.46
P/E Ratio 10.9x
P/E Ratio (Fwd) 11.1x
PEG Ratio -2.7
Total Debt to Capital (%) 21.5%
Levered Free Cash Flow $413.7 million
Market Capitalization $3.021 billion

Source: Finbox

Company Profile: Cathay General Bancorp

Cathay General Bancorp is a mid-cap stock with a market capitalization of $3.021 billion. The company operates in the Financial sector and the Banks industry.

Cathay General Bancorp operates as the holding company for Cathay Bank that offers various commercial banking products and services to individuals, professionals, and small to medium-sized businesses in the United States.

The company offers various deposit products, including passbook accounts, checking accounts, money market deposit accounts, certificates of deposit, individual retirement accounts, and public funds deposits. It also provides loan products, such as commercial mortgage loans, commercial loans, small business administration loans, residential mortgage loans, real estate construction loans, and home equity lines of credit, as well as installment loans to individuals for automobile, household, and other consumer expenditures.

The company offers letter of credit, wire transfer, forward currency spot and forward contract, traveler’s check, safe deposit, night deposit, social security payment deposit, collection, bank-by-mail, drive-up and walk-up window, automatic teller machine, Internet banking, trade financing, and other customary bank services, as well as securities and insurance products.

As of December 31, 2018, it operated 26 branches in Southern California; 14 branches in Northern California; 11 branches in New York; 3 branches in Illinois area; 4 branches in Washington; 2 branches in Texas; and 1 each branch in Maryland, Massachusetts, Nevada, New Jersey, and Hong Kong, as well as 1 representative office in Taipei and Shanghai. The company was founded in 1962 and is headquartered in Los Angeles, California.

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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