It’s been a mediocre week for Alerus Financial Corporation (NASDAQ:ALRS) shareholders, with the stock dropping 16% to US$24.06 in the week since its latest annual results. It was a credible result overall, with revenues of US$222m and statutory earnings per share of US$2.52 both in line with analyst estimates, showing that Alerus Financial is executing in line with expectations. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Alerus Financial
Taking into account the latest results, the current consensus, from the three analysts covering Alerus Financial, is for revenues of US$206.5m in 2021, which would reflect a discernible 7.1% reduction in Alerus Financial’s sales over the past 12 months. Statutory earnings per share are expected to nosedive 36% to US$1.68 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$206.5m and earnings per share (EPS) of US$1.68 in 2021. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
The consensus price target rose 17% to US$28.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Alerus Financial’s earnings by assigning a price premium.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 7.1%, a significant reduction from annual growth of 6.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Alerus Financial is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Alerus Financial’s revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Alerus Financial analysts – going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 2 warning signs for Alerus Financial (1 doesn’t sit too well with us!) that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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