Yahoo Finance SVB Financial Group Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?
SVB Financial Group (NASDAQ:SIVB) shares fell 2.2% to US$253 in the week since its latest yearly results. It was a credible result overall, with revenues of US$3.2b and statutory earnings per share of US$21.73 both in line with analyst estimates, showing that SVB Financial Group is executing in line with expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for SVB Financial Group
Taking into account the latest results, the latest consensus from SVB Financial Group's 16 analysts is for revenues of US$3.31b in 2020, which would reflect a modest 3.2% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to drop 11% to US$19.47 in the same period. Before this earnings report, analysts had been forecasting revenues of US$3.28b and earnings per share (EPS) of US$19.50 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$277, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SVB Financial Group analyst has a price target of US$312 per share, while the most pessimistic values it at US$225. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's pretty clear that analysts expect SVB Financial Group's revenue growth will slow down substantially, with revenues next year expected to grow 3.2%, compared to a historical growth rate of 20% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 4.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect SVB Financial Group to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for SVB Financial Group going out to 2021, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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