Stocks

Orrstown Financial Services (ORRF) Tops Q2 Earnings and Revenue Estimates

Orrstown Financial Services (ORRF) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.69 per share. This compares to earnings of $0.58 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 14.49%. A quarter ago, it was expected that this holding company for Orrstown Bank would post earnings of $0.77 per share when it actually produced earnings of $0.92, delivering a surprise of 19.48%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Orrstown, which belongs to the Zacks Banks - Northeast industry, posted revenues of $28.57 million for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 1.91%. This compares to year-ago revenues of $27.99 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Orrstown shares have added about 35.4% since the beginning of the year versus the S&P 500's gain of 13.4%.

What's Next for Orrstown?

While Orrstown has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Orrstown was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.60 on $27.4 million in revenues for the coming quarter and $2.66 on $111.64 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 25% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.


Zacks' Top Picks to Cash in on Artificial Intelligence

In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.

See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>

Click to get this free report

Orrstown Financial Services Inc (ORRF): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Investing

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More