Celebrations may be in order for First Western Financial, Inc. (NASDAQ:MYFW) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
After the upgrade, the dual analysts covering First Western Financial are now predicting revenues of US$103m in 2021. If met, this would reflect a substantial 21% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to be US$2.81, approximately in line with the last 12 months. Prior to this update, the analysts had been forecasting revenues of US$85m and earnings per share (EPS) of US$1.56 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$18.75, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic First Western Financial analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$17.00. This is a very narrow spread of estimates, implying either that First Western Financial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 First Western Financial's rate of growth is expected to accelerate meaningfully, with the forecast 21% revenue growth noticeably faster than its historical growth of 13% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect First Western Financial 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 next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So First Western Financial could be a good candidate for more research.
Analysts are clearly in love with First Western Financial at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. You can learn more, and discover the 1 other warning sign we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.