Q4 Earnings Preview for Live Oak (LOB)

in EARNINGS/INVESTING IDEAS by

Live Oak Bancshares, Inc. (NASDAQGS:LOB) is scheduled to report Q4 earnings results on Wednesday, January 22, 2020, after the closing bell. Management plans to host a conference call on Thursday, January 23, 2020, at 9:00 a.m. ET.

The company is expected to report earnings of $0.13/share on revenue of $54.613 million. The consensus earnings per share (EPS) of $0.13/share is based on a poll of 1 analyst and represents a decline of -50.0% over the same quarter last year when the company reported earnings of $0.26/share.

The revenue forecast of $54.613 million based on a poll of 1 analyst implies a year-over-year (YoY) growth of 16.5%. Last year the company reported $46.86 million in revenue for the quarter.

Expected to report EPS decline of -$0.13/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $54.61 $46.86 16.5%
EPS $0.13 $0.26 -50.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.13 $0.10 -20.0% Missed
Q2, 2019 $0.08 $0.14 75.0% Beat
Q1, 2019 $0.01 $0.06 300.0% Beat
Q4, 2018 $0.13 $0.26 108.0% Beat
Q3, 2018 $0.35 $0.40 12.7% Beat
Q2, 2018 $0.32 $0.35 9.4% Beat
Q1, 2018 $0.23 $0.31 34.8% Beat
Q4, 2017 $0.28 $0.41 46.4% Beat

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 did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-23 $18.49 $18.42 -0.4% Decline
2019-07-24 $16.17 $19.62 21.3% Increase
2019-04-24 $16.33 $16.17 -1.0% Decline
2019-01-23 $15.50 $13.25 -14.5% Decline

Fundamentals And Technical Analysis

Live Oak is currently trading at $18.70/share, up 0.0% for the day. The company is trading at approximately 91.4% of its 52-week high of $20.46/share. The company’s stock price is up 1.5% since the last earnings report and flat over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 51.81 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:LOB Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 34.7x and a forward P/E multiple of 42.4x.

Live Oak’s current share price also implies a price-to-book (P/B) multiple of 1.4x. 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) $18.70
P/E Ratio 34.7x
P/E Ratio (Fwd) 42.4x
PEG Ratio 0.7
Total Debt to Capital (%) 0.4%
Levered Free Cash Flow -$538.7 million
Market Capitalization $753.4 million

Source: Finbox

Company Profile: Live Oak Bancshares, Inc.

Live Oak Bancshares, Inc. is a small-cap stock with a market capitalization of $753.4 million. The company operates in the Financial sector and the Banks industry.

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. The company accepts various deposit products, including noninterest-bearing demand, interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner-occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government-guaranteed loans; and wealth and investment management services to high-net-worth individuals and families.

Live Oak Bancshares, Inc. was founded in 2008 and is headquartered in Wilmington, North Carolina.

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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