Heritage Commerce’s Earnings Fall Short, Investors on Edge

Heritage Commerce (HTBK) reported quarterly earnings of $0.17 per share, which aligns with the Zacks Consensus Estimate. This figure shows a decline from $0.26 per share a year earlier. These earnings are adjusted for non-recurring items.

Quarterly Performance Highlights

In the previous quarter, analysts anticipated earnings of $0.19 per share; however, the company managed only $0.15, resulting in a surprise drop of -21.05%.

Over the last four quarters, Heritage Commerce has consistently failed to meet consensus EPS estimates. The company, part of the Zacks Banks – West industry, generated revenues of $42.16 million for the quarter ending September 2024, which fell short of the Zacks Consensus Estimate by 2.28%. This represents a decrease from $47.59 million in the same quarter the previous year. Notably, the firm has not surpassed revenue estimates in the last four quarters.

The stock’s immediate price movements following this earnings report and future earnings expectations will largely depend on management’s insights during the upcoming earnings call.

Since the start of the year, Heritage Commerce shares have dropped about 2.1%, while the S&P 500 has increased by 21.5%.

Looking Ahead: Future Prospects for Heritage Commerce

Despite its underperformance this year, investors are keen to know what lies ahead for Heritage Commerce’s stock. While forecasts aren’t always straightforward, the company’s earnings outlook is a helpful tool. This includes current expectations for upcoming quarters and any recent changes to those expectations.

Research indicates a strong link between short-term stock movements and earnings estimate revisions. Investors may track these changes independently or use a reliable rating system like the Zacks Rank, which excels in identifying profitable stocks based on earnings revisions.

Leading up to this earnings release, the trend in estimate revisions for Heritage Commerce appears mixed. As a result, the stock currently has a Zacks Rank of #3 (Hold), suggesting it is likely to perform at par with the market soon. For additional insights, investors can review today’s top Zacks #1 Rank (Strong Buy) stocks.

Changes to earnings estimates in the upcoming days will be crucial. The current consensus for the next quarter sits at $0.18 EPS with projected revenues of $43.74 million, while estimates for the fiscal year stand at $0.65 EPS and $170.67 million in revenues.

Market trends within the banking sector can significantly impact the performance of stock as well. Presently, the Zacks Industry Rank places Banks – West in the bottom 39% among over 250 industries. Historically, the top half of Zacks-ranked industries have outperformed the lower half by more than a factor of two.

Another player in the same industry, Coastal Financial Corporation (CCB), has yet to disclose its results for the quarter ending September 2024. Analysts expect CCB to announce earnings of $0.96 per share, reflecting a year-over-year increase of +28%. Additionally, its consensus EPS estimate has risen by 4.8% over the last month.

Coastal Financial Corporation is projected to report revenues of $154.3 million, up 59.4% compared to the previous year’s quarter.

Investing Considerations for Heritage Commerce Corp (HTBK)

Before making any investment decisions regarding Heritage Commerce Corp (HTBK), investors may wish to explore the best stocks to consider for the next month. Zacks Investment Research offers a complimentary report highlighting seven top stock recommendations.

Zacks has been providing independent research and investor tools since 1978. Their stock-rating system, the Zacks Rank, has exceeded the S&P 500 over 24 years, averaging an impressive gain of +24.08% annually, based on returns from January 1, 1988, to May 6, 2024.

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Heritage Commerce Corp (HTBK): Free Stock Analysis Report

Coastal Financial Corporation (CCB): Free Stock Analysis Report

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.