Community West Bancshares (NASDAQ:CWBC) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Statutory earnings fell substantially short of expectations, with revenues of US$30m missing forecasts by 22%. Losses exploded, with a per-share loss of US$0.33 some 60% below prior forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the consensus forecast from Community West Bancshares' five analysts is for revenues of US$122.0m in 2024. This reflects a sizeable 43% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 42% to US$0.72. In the lead-up to this report, the analysts had been modelling revenues of US$140.2m and earnings per share (EPS) of US$1.40 in 2024. Indeed, we can see that the analysts are a lot more bearish about Community West Bancshares' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of US$23.75, suggesting the downgrades are not expected to have a long-term impact on Community West Bancshares' valuation. 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 Community West Bancshares analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$23.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Community West Bancshares is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Community West Bancshares' growth to accelerate, with the forecast 105% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.9% per annum 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 6.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Community West Bancshares to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Community West Bancshares. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$23.75, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Community West Bancshares going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Community West Bancshares (1 is potentially serious) you should be aware of.

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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.

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