Hope Q3 Earnings: Is NasdaqGS:HOPE Cheap at 0.5x Price/Book?

in EARNINGS/INVESTING IDEAS by

Hope Bancorp, Inc. (NasdaqGS:HOPE) is scheduled to report Q3 earnings results after markets close for trading on October 20, 2020.

The company is expected to report earnings of $0.19/share on revenue of $129.4 million. The consensus earnings per share (EPS) of $0.19/share is based on a poll of 6 analysts and represents a decline in eps of −43.1% over the same quarter last year, when the company reported earnings of $0.34/share.

The revenue forecast of $129.4 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 0.1%. Last year the company reported $129.3 million in revenue for the quarter.

Expected to report EPS contraction of −43.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $129.38 $129.25 0.1%
EPS $0.19 $0.34 −43.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 1 quarters, and met expectations 3 quarters.

What are your expectations from Hope Bancorp, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.18 $0.22 20.0% Beat
Q1, 2020 $0.23 $0.21 −9.4% Missed
Q4, 2019 $0.32 $0.34 7.9% Beat
Q3, 2019 $0.32 $0.34 5.3% Beat
Q2, 2019 $0.34 $0.34 −0.4% Missed
Q1, 2019 $0.34 $0.34 0.0% Met
Q4, 2018 $0.35 $0.36 2.0% Beat
Q3, 2018 $0.36 $0.36 −0.8% 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 June 30, 2020, the stock price remains flat.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $8.43 $8.43 0.0% No Change
April 28, 2020 $8.86 $10.09 13.9% Increase
January 22, 2020 $14.51 $14.64 0.9% Increase
October 21, 2019 $14.36 $14.73 2.6% Increase

Fundamentals And Technical Analysis

Hope Bancorp, Inc. is currently trading at $8.04/share, up 0.4% for the day. The company is trading at approximately 52.0% of its 52-week high of $15.51/share. The company’s stock price is down −4.6% since the last earnings report and down −2.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.95 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:HOPE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 7.15 and a forward P/E multiple of 9.67.

Hope Bancorp, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.49. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $8.04
P/E Ratio 7.1x
P/E Ratio (Fwd) 9.7x
PEG Ratio −0.4
Total Debt / Total Capital 47.8%
Levered Free Cash Flow $187.6 million
Free Cash Flow Yield 19%

Finbox

Hope Bancorp, Inc. is a small-cap stock with a market capitalization of $987.2 million. The company operates in the Financials sector and the Banks industry.

Hope Bancorp, Inc. operates as the bank holding company for Bank of Hope that provides banking services to small and medium-sized businesses and individuals in the United States. The company offers personal and business checking, money market, savings, time deposit, and individual retirement accounts. It also provides commercial loans to businesses for various purposes, such as working capital, purchasing inventory, debt refinancing, business acquisitions, and other business related financing needs; commercial real estate loans; small business administration (SBA) loans; and consumer loans, such as auto, home equity, single-family mortgage, and signature loans. In addition, the company offers trade finance services, including the issuance and negotiation of letters of credit, as well as handles documentary collections; commercial equipment lease financing; and warehouse lines of credit to mortgage loan originators. Further, it provides cash management services, such as remote deposit capture, lock box, and ACH origination services; investment and wealth management services; mobile banking; debit and credit card services; foreign exchanges services, safe deposit boxes, and other customary bank services; Internet banking and bill-pay services; and automated teller machine services. As of December 31, 2019, Hope Bancorp, Inc. operated 58 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia, and Alabama; SBA loan production offices in Seattle, Denver, Dallas, Atlanta, Portland, Oregon, New York City, Northern California, and Houston; a commercial loan production office in Northern California and Seattle; residential mortgage loan production offices in California; and a representative office in Seoul, Korea. The company was formerly known as BBCN Bancorp, Inc. and changed its name to Hope Bancorp, Inc. in August 2016. Hope Bancorp, Inc. was incorporated in 2000 and is headquartered in Los Angeles, California.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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