Preferred Bank (NasdaqGS:PFBC) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Preferred Bank (NasdaqGS:PFBC) is scheduled to report Q3 earnings results after markets close for trading on October 19, 2020.

The company is expected to report earnings of $1.05/share on revenue of $45.25 million. The consensus earnings per share (EPS) of $1.05/share is based on a poll of 5 analysts and represents a decline in eps of −20.3% over the same quarter last year when the company reported earnings of $1.32/share.

The revenue forecast of $45.25 million based on a poll of 2 analysts implies a year-over-year (YoY) growth in revenue of 4.7%. Last year the company reported $43.214 million in revenue for the quarter.

Expected to report EPS contraction of −20.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $45.25 $43.21 4.7%
EPS $1.05 $1.32 −20.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.97 $1.03 5.6% Beat
Q1, 2020 $1.01 $1.08 7.4% Beat
Q4, 2019 $1.26 $1.31 3.8% Beat
Q3, 2019 $1.31 $1.32 0.5% Beat
Q2, 2019 $1.28 $1.31 2.5% Beat
Q1, 2019 $1.24 $1.23 −0.8% Missed
Q4, 2018 $1.23 $1.09 −10.9% Missed
Q3, 2018 $1.17 $1.20 2.3% 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 June 30, 2020, 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
July 21, 2020 $39.97 $39.60 −0.9% Decline
April 22, 2020 $32.27 $34.30 6.3% Increase
January 22, 2020 $59.91 $63.98 6.8% Increase
October 16, 2019 $52.87 $52.08 −1.5% Decline

Fundamentals And Technical Analysis

Preferred Bank is currently trading at $34.07/share, up 0.4% for the day. The company is trading at approximately 53.0% of its 52-week high of $64.50/share. The company’s stock price is down −14.0% since the last earnings report and down −2.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 43.90 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:PFBC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 7.16 and a forward P/E multiple of 7.90.

Preferred Bank’s current share price also implies a price-to-book (P/B) multiple of 1.03. 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) $34.07
P/E Ratio 7.2x
P/E Ratio (Fwd) 7.9x
PEG Ratio −1.7
Total Debt / Total Capital 18.9%
Levered Free Cash Flow $80.899 million
EV / EBITDA

Finbox

Preferred Bank is a small-cap stock with a market capitalization of $505.7 million. The company operates in the Financials sector and the Banks industry.

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; and commercial loans comprising lines of credit for working capital and term loans for capital expenditures, as well as equipment financing. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, export financing, bills purchase programs, and acceptances/trust receipt financing products, as well as standby letters of credit, and foreign exchange services for importers and exporters. Further, it provides various high-wealth banking services to wealthy individuals residing in the Pacific Rim area; and remote deposit capture, and online and mobile banking services. Additionally, the company offers various banking services to physicians, accountants, attorneys, business managers, and other professionals; and safe deposit boxes, account reconciliation, courier service, and cash management services to the manufacturing, service, and distribution companies. As of December 31, 2019, it had thirteen full-service branch offices in Alhambra, Arcadia, Century City, City of Industry, Diamond Bar, Los Angeles, Pico Rivera, San Francisco, Tarzana, Torrance, and Irvine, California; and Flushing, New York. The company was founded in 1991 and is headquartered in Los Angeles, California.

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