It's been a mediocre week for Triumph Bancorp, Inc. (NASDAQ:TBK) shareholders, with the stock dropping 19% to US$96.61 in the week since its latest annual results. It was a workmanlike result, with revenues of US$432m coming in 4.7% ahead of expectations, and statutory earnings per share of US$4.35, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Triumph Bancorp's seven analysts is for revenues of US$457.4m in 2022, which would reflect a modest 5.8% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dip 2.3% to US$4.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$454.6m and earnings per share (EPS) of US$4.27 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$123. 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. There are some variant perceptions on Triumph Bancorp, with the most bullish analyst valuing it at US$170 and the most bearish at US$107 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Triumph Bancorp's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 5.8% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this to the 690 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like Triumph Bancorp is forecast to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Triumph Bancorp analysts - going out to 2023, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Triumph Bancorp that you should be aware of.
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