Bay Commercial Bank (BCML) lags second-quarter earnings and revenue estimates

Bay Commercial Bank (BCML) posted quarterly earnings of $0.38 per share, missing Zacks’ consensus estimate of $0.52 per share. That compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of -26.92%. A quarter ago, this company was expected to post a profit of $0.36 per share when it actually produced a profit of $0.51, delivering a surprise of 41.67%.

In the past four quarters, the company has exceeded consensus EPS estimates twice.

Commercial Bank of the Bay, which is industry-owned Zacks Banks – West, posted revenue of $25.19 million for the quarter ended June 2022, missing Zacks’ consensus estimate by 6.02%. That compares to revenues of $20.24 million a year ago. The company has exceeded consensus revenue estimates three times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Bay Commercial Bank shares are up about 11.4% year-to-date compared to the -16.9% decline in the S&P 500.

What’s next for Bay Commercial Bank?

With Bay Commercial Bank outperforming the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Before that Press release, the trend of estimate revisions for Bay Commercial Bank: favorable. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a Zacks No. 1 ranking (Strong Buy) for the stock. Thus, stocks are expected to outperform the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.56 on $27.2 million in revenue for the upcoming quarter and $2.34 on $106.7 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Banks – West is currently in the top 11% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Sierra Bancorp (BSRR), has yet to report results for the quarter ending June 2022.

This parent company of Bank of the Sierra is expected to post quarterly earnings of $0.58 per share in its next report, representing a year-over-year change of -23.7%. The consensus EPS estimate for the quarter has been revised up 1.6% in the past 30 days from the current level.

Sierra Bancorp’s revenue is expected to be $32.8 million, down 3% from the year-ago quarter.

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