Earnings Release: Here's Why Analysts Cut Their Sierra Bancorp (NASDAQ:BSRR) Price Target To US$31.25

Sierra Bancorp (NASDAQ:BSRR) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at US$37m, statutory earnings were in line with expectations, at US$0.65 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the most recent consensus for Sierra Bancorp from five analysts is for revenues of US$154.5m in 2025. If met, it would imply a credible 7.1% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$2.93, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$155.1m and earnings per share (EPS) of US$2.87 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Sierra Bancorp

The average the analysts price target fell 6.7% to US$31.25, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sierra Bancorp analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$28.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Sierra Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 9.5% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.6% p.a. 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 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sierra Bancorp to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sierra Bancorp following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sierra Bancorp going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Sierra Bancorp that 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.