Avidbank Holdings Surpasses Earnings Estimates Despite Recent Stock Struggles

Avidbank Holdings Inc. (AVBH) reported quarterly earnings of $0.77 per share, exceeding the Zacks Consensus Estimate of $0.68. This is an increase from last year’s earnings of $0.72 per share, adjusted for non-recurring items.

This quarterly result marks an earnings surprise of 13.24%. In the previous quarter, expectations were set at $0.68 per share, but the company reported only $0.46, leading to a -32.35% surprise.

In the past year, Avidbank has beaten consensus EPS estimates two out of four times. It belongs to the Zacks Banks – West industry and recorded revenues of $20.4 million for the quarter ending September 2024, which is 1.11% above the Zacks Consensus Estimate. This also represents a rise from $18.55 million in revenues from the same quarter last year. In total, Avidbank topped consensus revenue estimates twice over the last four quarters.

The sustainability of the stock’s recent price changes and future earnings expectations will rely heavily on the management’s comments during the earnings call.

So far this year, Avidbank Holdings’ shares have declined by about 8.3%, while the S&P 500 has risen by 23%.

What Lies Ahead for Avidbank Holdings?

Despite Avidbank’s underperformance in the market this year, investors are left wondering what the future holds for the stock.

While answers may not be straightforward, analysts often look to earnings outlook as a key indicator. This includes current consensus earnings expectations for upcoming quarters and any recent changes in those expectations.

Research indicates a strong link between short-term stock movements and the trends in earnings estimate revisions. Investors can track these changes independently or use a well-regarded rating tool like the Zacks Rank, known for effectively reflecting earnings estimate adjustments.

Ahead of this earnings release, Avidbank Holdings has seen a downward trend in estimate revisions. Although this could shift following the latest earnings announcement, the current outlook has led to a Zacks Rank of #4 (Sell) for the stock, suggesting it may continue to underperform in the near term. A complete list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.

It will be interesting to monitor upcoming adjustments to estimates for the next quarters and the current fiscal year. The current consensus EPS estimation stands at $0.67 on $20.69 million in revenues for the next quarter, with an expectation of $2.43 on $80.66 million for the current fiscal year.

Investors must also consider that the industry outlook can significantly affect stock performance. According to the Zacks Industry Rank, the Banks – West sector is currently in the bottom 40% of over 250 Zacks industries. Historical data shows that the top 50% of Zacks-ranked industries outperform the bottom half by more than a two-to-one ratio.

In the same industry, First Financial Northwest (FFNW) has not yet reported its results for the quarter ending September 2024.

First Financial is projected to announce quarterly earnings of $0.07 per share, reflecting a year-over-year decline of 56.3%. The EPS consensus estimate has not changed in the last month.

Expected revenues for First Financial Northwest are $9.49 million, which represents an 8.6% decrease from the previous year’s quarter.

Should You Consider Investing in Avidbank Holdings Inc. (AVBH)?

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Avidbank Holdings Inc. (AVBH): Free Stock Analysis Report

First Financial Northwest, Inc. (FFNW): Free Stock Analysis Report

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