Bank OZK Q3 Earnings: Is NasdaqGS:OZK Cheap at 0.7x Price/Book?

in EARNINGS/INVESTING IDEAS by

Bank OZK (NasdaqGS:OZK) is scheduled to report Q3 earnings results after markets close for trading on October 22, 2020.

The company is expected to report earnings of $0.59/share on revenue of $244.3 million. The consensus earnings per share (EPS) of $0.59/share is based on a poll of 8 analysts and represents a decline in eps of −27.7% over the same quarter last year, when the company reported earnings of $0.81/share.

The revenue forecast of $244.3 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −0.8%. Last year the company reported $246.3 million in revenue for the quarter.

Expected to report EPS contraction of −27.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $244.29 $246.26 −0.8%
EPS $0.59 $0.81 −27.7%

Earnings Call Trends

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

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.38 $0.39 2.9% Beat
Q1, 2020 $0.61 $0.09 −85.3% Missed
Q4, 2019 $0.76 $0.78 2.3% Beat
Q3, 2019 $0.82 $0.81 −0.9% Missed
Q2, 2019 $0.85 $0.86 0.6% Beat
Q1, 2019 $0.85 $0.86 1.7% Beat
Q4, 2018 $0.83 $0.90 8.3% Beat
Q3, 2018 $0.91 $0.64 −29.9% 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 reacted by increasing 2.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 23, 2020 $23.71 $24.32 2.6% Increase
April 23, 2020 $17.35 $19.78 14.0% Increase
January 16, 2020 $30.04 $29.25 −2.6% Decline
October 17, 2019 $28.30 $28.97 2.4% Increase

Fundamentals And Technical Analysis

Bank OZK is currently trading at $21.75/share, up 0.9% for the day. The company is trading at approximately 68.5% of its 52-week high of $31.76/share. The company’s stock price is down −10.6% since the last earnings report and down −0.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 44.08 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:OZK Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 10.54 and a forward P/E multiple of 12.99.

Bank OZK’s current share price also implies a price-to-book (P/B) multiple of 0.68. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.75
P/E Ratio 10.5x
P/E Ratio (Fwd) 13.0x
PEG Ratio −0.3
Total Debt / Total Capital 31.9%
Levered Free Cash Flow $392.5 million
Price To Sales 3.7x

Finbox

Bank OZK is a mid-cap stock with a market capitalization of $2.813 billion. The company operates in the Financials sector and the Banks industry.

Bank OZK provides various retail and commercial banking services. The company accepts various deposit products, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time deposits. It also offers real estate, consumer and small business, indirect consumer RV and marine, commercial and industrial, government guaranteed, agricultural, homebuilder, and affordable housing loans; business aviation and subscription financing services; and mortgage and other lending products. The company also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, retirement accounts, and corporate trust services. In addition, it offers automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, and merchant and commercial card services, as well as zero balance and investment sweep accounts. Further, the company is involved in the provision of real estate appraisals; ATMs; telephone, online, and mobile banking services; debit and credit cards; safe deposit boxes; and other products and services, as well as processes merchant debit and credit card transactions. As of June 30, 2020, it operated approximately 250 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York, and Mississippi. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.

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