First Foundation Q3 Earnings: Is NasdaqGM:FFWM Cheap at 9.0x Forward P/E?

in EARNINGS/INVESTING IDEAS by

First Foundation Inc. (NasdaqGM:FFWM) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.50/share on revenue of $65.225 million. The consensus earnings per share (EPS) of $0.50/share is based on a poll of 5 analysts and represents a growth in eps of 28.2% over the same quarter last year, when the company reported earnings of $0.39/share.

The revenue forecast of $65.225 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 14.2%. Last year the company reported $57.114 million in revenue for the quarter.

Expected to report EPS growth of 28.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $65.22 $57.11 14.2%
EPS $0.50 $0.39 28.2%

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 First Foundation Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.36 $0.40 12.4% Beat
Q1, 2020 $0.29 $0.29 0% Met
Q4, 2019 $0.31 $0.34 9.7% Beat
Q3, 2019 $0.36 $0.39 7.1% Beat
Q2, 2019 $0.27 $0.28 4.5% Beat
Q1, 2019 $0.27 $0.25 −7.4% Missed
Q4, 2018 $0.28 $0.31 10.7% Beat
Q3, 2018 $0.26 $0.33 26.0% 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 reacted by increasing 7.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 21, 2020 $14.92 $16.09 7.8% Increase
April 22, 2020 $10.84 $11.49 6.0% Increase
January 28, 2020 $16.20 $16.73 3.3% Increase
October 23, 2019 $15.51 $15.73 1.4% Increase

Fundamentals And Technical Analysis

First Foundation Inc. is currently trading at $15.45/share, up 3.1% for the day. The company is trading at approximately 87.6% of its 52-week high of $17.64/share. The company’s stock price is down −4.0% since the last earnings report and up 7.9% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.40 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:FFWM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 10.83 and a forward P/E multiple of 8.99.

First Foundation Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.08. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $15.45
P/E Ratio 10.8x
P/E Ratio (Fwd) 9.0x
PEG Ratio 0.5
Total Debt / Total Capital 53.9%
Levered Free Cash Flow $62.251 million
Price To Sales 3.2x

Finbox

First Foundation Inc. is a small-cap stock with a market capitalization of $689.5 million. The company operates in the Financials sector and the Banks industry.

First Foundation Inc., through its subsidiaries, provides financial services to individuals, businesses, and other organizations in the United States. It operates in two segments, Banking; and Investment Management and Wealth Planning. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificates of deposit; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, and commercial term loans and lines of credit, as well as consumer loans, such as personal installment loans and lines of credit, and home equity lines of credit. It also provides various specialized services comprising trust services, online banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 20 branch offices and 2 loan production offices in California, Nevada, and Hawaii. The company was founded in 1985 and is headquartered in Irvine, 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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