Celebrations may be in order for Nicolet Bankshares, Inc. (NASDAQ:NCBS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 4.6% to US$92.19 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?
After the upgrade, the four analysts covering Nicolet Bankshares are now predicting revenues of US$252m in 2022. If met, this would reflect a notable 20% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 36% to US$6.89. Previously, the analysts had been modelling revenues of US$202m and earnings per share (EPS) of US$6.29 in 2022. The most recent forecasts are noticeably more optimistic, with a considerable lift to revenue estimates and a lift to earnings per share as well.
With these upgrades, we’re not surprised to see that the analysts have lifted their price target 13% to US$101 per share. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Nicolet Bankshares at US$100.00 per share, while the most bearish prices it at US$94.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It’s clear from the latest estimates that Nicolet Bankshares’ rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nicolet Bankshares to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Nicolet Bankshares could be worth investigating further.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates – from multiple Nicolet Bankshares analysts – going out to 2023, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.