Provident Financial Services Q3 Earnings: Is NYSE:PFS Cheap at 0.6x Price/Book?

in EARNINGS/INVESTING IDEAS by

Provident Financial Services, Inc. (NYSE:PFS) is scheduled to report Q3 earnings results on October 30, 2020.

The company is expected to report earnings of $0.18/share on revenue of $97.425 million. The consensus earnings per share (EPS) of $0.18/share is based on a poll of 6 analysts and represents a decline in eps of −62.6% over the same quarter last year, when the company reported earnings of $0.49/share.

The revenue forecast of $97.425 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 6.4%. Last year the company reported $91.575 million in revenue for the quarter.

Expected to report EPS contraction of −62.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $97.43 $91.58 6.4%
EPS $0.18 $0.49 −62.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.15 $0.24 62.7% Beat
Q1, 2020 $0.34 $0.25 −26.1% Missed
Q4, 2019 $0.43 $0.40 −7.0% Missed
Q3, 2019 $0.45 $0.49 8.9% Beat
Q2, 2019 $0.47 $0.38 −18.8% Missed
Q1, 2019 $0.46 $0.48 5.1% Beat
Q4, 2018 $0.49 $0.50 2.3% Beat
Q3, 2018 $0.46 $0.54 18.1% 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 falling −6.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $14.58 $13.65 −6.4% Decline
April 30, 2020 $16.09 $13.66 −15.1% Decline
January 31, 2020 $23.56 $22.81 −3.2% Decline
October 25, 2019 $24.98 $25.12 0.6% Increase

Fundamentals And Technical Analysis

Provident Financial Services, Inc. is currently trading at $13.71/share, down −0.4% for the day. The company is trading at approximately 53.8% of its 52-week high of $25.49/share. The company’s stock price is up 0.4% since the last earnings report and up 5.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 59.26 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:PFS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 10.46 and a forward P/E multiple of 11.83.

Provident Financial Services, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.64. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $13.71
P/E Ratio 10.5x
P/E Ratio (Fwd) 11.8x
PEG Ratio −0.3
Total Debt / Total Capital 59.7%
Levered Free Cash Flow $121.6 million
Price To Sales 2.8x

Finbox

Provident Financial Services, Inc. is a small-cap stock with a market capitalization of $905.4 million. The company operates in the Financials sector and the Thrifts & Mortgage Finance industry.

Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. The company’s deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, marine loans, personal loans, and auto and recreational vehicle loans. The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, it provides wealth management services comprising investment management, trust and estate administration, financial planning, tax compliance and planning, and private banking. Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. As of December 31, 2019, it operated 83 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

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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