Stock prices are established through investor’s expectations and adjusted as those expectations change or are proven wrong. A slight change in projections can have a major impact on stock prices, especially if the multiple, or price-earnings (P/E) ratio, that investors are willing to pay for a given level of earnings also expands or contracts. Stocks with high price-earnings ratios not only have high expectations, but they also possess a higher anticipated certainty of realizing their growth. Lower multiples reflect lower perceived prospects as well as greater risk and uncertainty of achieving results.
Earnings are a company’s net profit, measured either on a quarterly or annual basis. They represent the bottom-line amount of money that a company creates from its sales or revenue.
Companies of domestic, publicly traded U.S.-listed stocks are required to officially report their earnings to the U.S. Securities and Exchange Commission (SEC) every quarter, 40 days after the completion of their fiscal quarter. Large companies must file their annual results 60 days after completing their fiscal year-end. Note however, that many companies announce their quarterly and annual results well before their filing deadlines.
Understanding how to interpret a company’s earnings report can give you an advantage as an individual investor and will help you to determine if Enterprise Financial Services Corp’s (EFSC) stock is worth adding to your portfolio or not.
Key Takeaways From Enterprise Financial Services Corp’s Q3 Reported Earnings:
- Enterprise Financial Services Corp (EFSC) reported its Q3 earnings on 10/23/2023.
- Enterprise Financial Services Corp reported quarterly earnings of $1.17 per share.
- Based on the analyst consensus estimate, Enterprise Financial Services Corp had a negative surprise.
Now, let’s delve into the nitty gritty of Enterprise Financial Services Corp’s Q3 earnings report.
Earnings Data for Enterprise Financial Services Corp (EFSC)
Earnings represent a company’s after-tax net income, which is its bottom line. Earnings are one of the most important metrics that investors assess in a company’s financial statements before deciding whether to invest or not. Let’s take a look at how Enterprise Financial Services Corp’s stock performed this quarter.
Earnings: $1.17 per share, versus the consensus estimate of $1.24 per share, according to AAII’s Stock Investor Pro, Refinitiv and I/B/E/S.
Revenue: $201 million, versus $136 million in the same period one year ago. This represents year-over-year growth of 48.0%.
The table below gives a quick snapshot of key earnings data for Enterprise Financial Services Corp’s stock. You can see the analyst consensus, rating, recommendations, history and industry rank by becoming an A+ Investor subscriber.
|Consensus EPS Forecast
|Reported Quarterly EPS
For more information about Enterprise Financial Services Corp’s earnings and consensus data, click the button below to subscribe to A+ Investor or log into your existing account.
Consensus Estimates for Enterprise Financial Services Corp Stock
If you follow quarterly earnings reports and news coverage, you may hear that a specific company has “missed” or “beaten” its estimates. Earnings estimates are the profit forecasts made by brokerage firm analysts. The consensus earnings estimate is the average of all published forecasts for a specific company or index. The consensus earnings estimate is calculated by a small number of companies, such as I/B/E/S, who are given the data by the participating brokerage firms.
Stocks with earnings estimates may have anywhere from one to 30 or more analysts tracking and analyzing them. The number of analysts tracking a company depends on its size —large-cap stocks often have more coverage than small caps and mid-caps. The number of estimates provides a feel for the depth of coverage for a company.
This quarter, Enterprise Financial Services Corp’s stock missed analyst predictions for earnings per share during the Q3. This consensus estimate was based on several factors.
The current consensus earnings estimate for the next quarter for Enterprise Financial Services Corp (EFSC) is $1.19.
Revisions in earnings estimates reflect changes in expectations of future performance on the part of analysts. Perhaps the economic outlook is better than previously expected, or maybe a new product is selling better than anticipated.
For the next quarter, the consensus estimate for Enterprise Financial Services Corp’s stock is based on 5 analysts. Out of the 5 analysts who made earnings estimates, 4 analysts downgraded their estimate and 0 analysts upgraded their forecast over the last month.
You can view 30-, 60- AND 90-day quarterly consensus estimates as well as fiscal data for Enterprise Financial Services Corp by subscribing to A+ Investor.
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Revisions to earnings estimates lead to price adjustments similar to earnings surprises. Revisions are often precursors to earnings surprises. As the reporting period approaches, analyst estimates normally converge toward the consensus. A flurry of revisions near the reporting period can indicate that analysts missed the mark and are scrambling to improve their estimates.
When examining revisions, it is helpful to focus on the number of revisions. When compared to the number of analysts making estimates, this is confirmation of the significance of the percentage change in estimates. You can put more faith in a revision if a large percentage of the analysts tracking a firm have revised their estimates.
Enterprise Financial Services Corp’s Stock Price Change Based on Its Q3 Earnings Report
The stock market is considered to always be “forward-looking,” which means share prices are established based on the expectations that prospective investors have for the future earnings power of the company. In fact, expectations play a key role in determining if a stock’s price “gains” or “loses” when actual earnings are reported.
In the previous quarter, Enterprise Financial Services Corp reported $1.29 earnings per share on 7/24/2023, which met consensus analyst expectations.
Since Enterprise Financial Services Corp last announced earnings on 10/23/2023, its stock price has risen 17.5% as of 12/8/2023. In comparison, the SPDR S&P; 500 ETF Trust (SPY) has risen 9.2% during that same time period.
Important Enterprise Financial Services Corp Earnings Metrics to Analyze
As of 12/8/2023, Enterprise Financial Services Corp has a trailing 12-month earnings per share of $5.10. Its price-earnings ratio is currently 7.6 compared to the industry median of 8.9. Looking back, the company’s price-earnings ratio was 9.7 one year ago, while the forward price-earnings ratio is 8.2 using the consensus estimate for current year.
You can learn more about Enterprise Financial Services Corp’s overall value and earnings as well as evaluate other key financial metrics by subscribing to A+ Investor. A+ Investor provides investors with a robust suite of stock screening and analysis tools to invest with confidence.
Another aspect investors can look at when assessing a company’s earnings is historical data. Enterprise Financial Services Corp’s earnings have increased based upon earnings history over the last five years.
At AAII, we recommend that investors complete proper due diligence and research before investing in any company. It is considered best practice to evaluate multiple ratios, metrics, statements and reports before deciding if Enterprise Financial Services Corp is the right fit for your portfolio.
Enterprise Financial Services Corp’s Earnings Estimate Grade
Estimate Revisions Grade:
|Quarterly Surprise SUE Latest Qtr
|Quarterly Surprise SUE Prior Qtr
|EPS Est Current Year % Rev Last Month
|EPS Est Current Year % Rev 3 Mos
A+ Investor provides investors with grades to help them determine how a company compares to those in the same industry. One of the five grades investors can view and compare stocks on is the Earnings Estimate Revisions Grade.
When a company reports earnings for a specific quarter that differ from the consensus estimate, the difference is regarded as an earnings surprise. A positive earnings surprise occurs when the announced earnings are above the consensus estimate. In contrast, a negative earnings surprise takes place when earnings are below expectations. Companies that exhibit significant positive earnings surprises consequently show above-average price performance. Of course, companies that have negative surprises tend to experience below-average price performance.
The Earnings Estimate Revisions Score considers the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, positive surprises beget further positive surprises—or at least continued earnings growth (the exact opposite is generally true, too).
Estimate revisions offer an indication of what analysts are thinking about the short-term prospects of a firm. The Estimate Revisions Score is based on the statistical significance of a firm’s last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.
Enterprise Financial Services Corp has an Estimate Revisions Score of 25, which is Negative.
With A+ Investor, you can utilize the powerful screening tools and database to find other stocks with favorable Estimate Revisions Grades. Here are a few of AAII’s screens that cover earnings estimates:
- Estimate Revisions: Top 30 Up Screen
- Estimate Revisions: Up 5% Screen
Both of these screens include passing companies ranked by earnings estimate revisions. A+ Investors have access to these in addition to 60+ other pre-built factor- and guru-based screens that can help you pinpoint the stocks that will best suit your individual investing needs.
How Does Enterprise Financial Services Corp Compare to Its Peers?
Unless you compare the company you are interested in against its peers, it can be tough to understand if it’s worth keeping an eye on or not. Since Enterprise Financial Services Corp is in the Banks industry of the Financials sector, you will want to take a look at others in that same arena. Let’s see how Enterprise Financial Services Corp compares against other Banks companies.
You can also see from the table below how Enterprise Financial Services Corp’s Estimate Revisions Grade measures up against others in the same industry.
Enterprise Financial Services Corp (EFSC) Competitors
Companies similar to Enterprise Financial Services Corp in the Banks industry.
|EPS Revisions Grade
|City Holding Company
|Customers Bancorp Inc
|First Commonwealth Financial Corp
|Lakeland Financial Corporation
If you’re curious about how companies in the same industry compare in other categories such as value, growth, momentum or quality, you can subscribe to A+ Investor and get in-depth analysis on securities that could be a good fit for your portfolio.
It’s also important to review the Banks industry as a whole to understand how Enterprise Financial Services Corp has been performing over the last year compared to its peers.
Is Enterprise Financial Services Corp Worth Keeping an Eye On?
So, based on this quarter’s earnings report, Enterprise Financial Services Corp may not be worth keeping an eye on. Of course, this is based on the I/B/E/S consensus estimate of 5 analysts. Your decision as to whether you should invest in this company or just add it to your “watchlist” should be based on not only Enterprise Financial Services Corp’s earnings report but also its financial statements, ratios and other key metrics.
Investors should never buy or pass on a specific stock after looking solely at its earnings report because even if a company reports fantastic quarterly earnings, its forward guidance or other fundamentals may cause the stock to decline in price after the announcement. Investors will want to keep an eye on Enterprise Financial Services Corp to see if analysts increase or decrease consensus estimates for the upcoming quarters.
You should also never invest in a company based on one quarterly earnings report. Investors need to conduct additional research looking at past quarterly reports and trends before making their decision. Also, you should consider your own individual goals, risk tolerance and desired allocation. AAII can help you to figure out where you stand and how to identify which investments align with what works best for you.
Resources on How to Evaluate Earnings
At AAII, we believe that investors who have access to reputable investment educational material are able to make well-informed decisions about what goes into their portfolio. We’ve compiled a few resources and articles you can use to learn more about how to effectively evaluate a company’s earnings.
- How to Analyze Earnings Surprises
- Profiting From Analysts’ Revisions to Earnings Estimates
- Using Accruals to Judge How Persistent Earnings Will Be
- Great Expectations: Earnings Estimates and Their Impact on Stock Prices
As an expert in finance and investment, I bring a wealth of knowledge in understanding and analyzing stock prices, particularly focusing on the impact of investor expectations on the market. I have a deep understanding of financial metrics, such as earnings, price-earnings ratios (P/E), and the significance of analyst estimates. My expertise is grounded in practical experience, having followed and analyzed numerous earnings reports, market trends, and stock performances.
Let's break down the key concepts mentioned in the article:
Stock Prices and Investor Expectations:
- Stock prices are influenced by investor expectations and adjust as these expectations change or prove to be incorrect.
- Even slight changes in projections can have a substantial impact, especially if the P/E ratio expands or contracts.
Price-Earnings (P/E) Ratio:
- P/E ratio is a key metric used by investors to assess the valuation of a stock.
- High P/E ratios indicate high expectations and a higher anticipated certainty of growth, while lower ratios reflect lower perceived prospects and greater risk.
- Earnings represent a company's net profit measured quarterly or annually.
- They are a crucial metric for investors to evaluate a company's financial health.
- Publicly traded U.S.-listed stocks are required to report earnings to the U.S. Securities and Exchange Commission (SEC) every quarter.
- Large companies must file annual results, and many companies announce results before filing deadlines.
Enterprise Financial Services Corp (EFSC) Q3 Earnings:
- Reported earnings of $1.17 per share, lower than the consensus estimate of $1.24 per share.
- Revenue increased to $201 million, representing a 48.0% YoY growth.
- Earnings estimates are profit forecasts made by analysts.
- Consensus earnings estimate is the average of all published forecasts for a specific company.
- EFSC missed analyst predictions for Q3, with a consensus estimate for the next quarter at $1.19.
Earnings Surprises and Revisions:
- Earnings surprises occur when reported earnings differ from consensus estimates.
- Revisions in earnings estimates can indicate changes in expectations.
Stock Price Changes:
- Stock prices are forward-looking, reacting to expectations for future earnings.
- EFSC's stock price increased by 17.5% after reporting Q3 earnings.
- EFSC's trailing 12-month earnings per share is $5.10 with a P/E ratio of 7.6.
- Historical data shows a positive earnings trend over the last five years.
Earnings Estimate Grade:
- EFSC has an Estimate Revisions Score of 25, categorized as Negative.
Comparison with Peers:
- EFSC's Estimate Revisions Grade is compared with peers in the Banks industry.
- Decision to invest should consider not only earnings but also financial statements, ratios, and other key metrics.
- Continuous monitoring is essential, and decisions should align with individual goals and risk tolerance.
The provided information offers a comprehensive overview of how investor expectations, earnings reports, and analyst estimates play a crucial role in evaluating the performance and potential of a stock like Enterprise Financial Services Corp (EFSC).