Equity Bancshares (EQBK), Earnings Expected To Grow: Should You Invest?

Equity Bancshares (EQBK), is expected to report a year-overyear increase in earnings due to higher revenues during the quarter ended December 20,22. The consensus outlook is well-known and provides a clear picture of the company’s earnings. However, how actual results compare with these estimates could have a significant impact on the stock’s near-term price.

If these key numbers are higher than expected, the earnings report will be published on January 25, 2023. However, the stock might move lower if they fall short of expectations.

Although management will discuss business conditions on the earnings conference, which will most likely determine the sustainability for the immediate price change as well as future earnings expectations and earnings estimates, it’s worth looking at the odds of a positive surprise in EPS.

Zacks Consensus Estimate

The bank holding company will report quarterly earnings of $0.83 per shares in its next report. This represents an increase of +1.2% year-over-year.

Revenues are expected increase 9.7% to $50.89 million from the year-ago quarter.

Trend in Estimate Revisions

Over the past 30 days, the consensus EPS estimate has been revised to 2.2% lower than the current level. This is basically a reflection on how the covering analysts collectively reassessed initial estimates during this period.

Investors should remember that an aggregate change might not always reflect the direction in which each analyst revised their estimates.

Earnings Whisper

The estimates of revisions that are made ahead of an earnings release by a company can give clues about the business environment for the period. This insight is the heart of our proprietary surprise prediction model, the Zacks Earnings ESP.

The Zacks Earnings ESP compares most accurate estimates to the Zacks Consensus Estimate. For the quarter, the Most Accurate Estimate uses a newer version of the Zacks Consensus EPS estimate. This is because analysts who revise their estimates before earnings releases have the most recent information. It could be that this information may be more accurate than what others contributed to the consensus.

A positive or negative Earnings ESP reading can theoretically indicate the likelihood of earnings that are different from the consensus estimate. Positive ESP readings are not affected by the model’s predictive ability.

An earnings beat is predicted by a positive Earnings ESP, especially when it’s combined with a Zacks Rank #1 or #2 (Strong Buy), 3 (Hold) or 3. This combination produces a positive surprise almost 70% of the times. A solid Zacks Rank increases the predictive power for Earnings ESP.

A negative Earnings ESP reading does not necessarily indicate an earnings miss. It is not possible to predict an earnings beat for stocks with negative Earnings EESP readings and/or Zacks Rankings of 4 (Sell), or 5 (Strong Buy).

What have the numbers looked like for Equity Bancshares

Equity Bancshares has a lower Most Accurate estimate than the Zacks Consensus, which suggests that analysts have become bearish about the company’s prospects for earnings. This has caused an EarningsESP to be -8.43%.

However, the stock currently has a Zacks Rank 3rd.

This combination makes it difficult for Equity Bancshares to beat the consensus EPS estimate.

Is Earnings History a Surprise?

Analysts often look at past consensus estimates when calculating future earnings estimates for companies. It’s worthwhile to look at past surprises in order to gauge its impact on the future number.

Equity Bancshares had been expected to report earnings of $0.80 per shares for the last quarter. Instead, it produced earnings $0.94 per share, which was unexpectedly +7.50%.

The company beat consensus EPS estimates 4 times in the past four quarters.

Bottom Line

A stock’s ability to move higher or lower may not depend on whether it has an earnings beat or miss. Stocks can lose ground even if earnings beats are achieved. This is because investors may be disappointed by other factors. Unexpected catalysts can also help stocks gain even if earnings are below expectations.

However, betting on stocks which are expected to exceed earnings expectations can increase the chances of success. Before each quarter’s quarterly release, it is worth checking the Earnings ESP of a company and Zacks Rank. Our Earnings ESP Filter will help you find the best stocks to purchase or sell before they report.

Equity Bancshares does not appear to be a strong earnings-beat candidate. Investors need to be mindful of other factors when betting on Equity Bancshares or staying away before its earnings release.

Expected results for an industry player

Community Bank System (CBU), a stock in the Zacks Banks Northeast industry, will soon post earnings of $0.95 per share for the quarter ended Dec 2022. This is a +17.3% increase in year-over-year earnings. This quarter’s revenue is expected at $177.6million, which is 11.2% more than the year-ago quarter.

In the last 30 Days, the consensus EPS estimate has been revised by 1.7% to the current level. However, the EarningsESP is now at -0.35%. This reflects a lower Most Accurate estimate.

It is difficult to predict whether Community Bank will surpass the consensus EPS estimate because of its Earnings ESP and Zacks Rank #3. The company has exceeded consensus EPS estimates three more times in the past four quarters.

Keep up-to-date with future earnings announcements using the Zacks Earnings Calendar.

Want the latest Zacks Investment Research recommendations? You can now download 7 Best Stocks to Watch in the Next 30 days. Click to get this free report

Equity Bancshares, Inc. (EQBK) : Free Stock Analysis Report

Community Bank System, Inc. (CBU) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Previous post Trey Lance might have hinted that he wanted to follow Ran Carthon’s lead to the Titans.
Next post Dr. Nowinski urges NHL to modify’shockingly’ concussion protocol