Celebrations may be in order for Limestone Bancorp, Inc. (NASDAQ:LMST) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Limestone Bancorp will make substantially more sales than they'd previously expected.
Following the latest upgrade, the twin analysts covering Limestone Bancorp provided consensus estimates of US$46m revenue in 2022, which would reflect an uneasy 10% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$42m in 2022. It looks like there's been a clear increase in optimism around Limestone Bancorp, given the decent improvement in revenue forecasts.
Check out our latest analysis for Limestone Bancorp
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2022. This indicates a significant reduction from annual growth of 6.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Limestone Bancorp is expected to lag the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Limestone Bancorp.
Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Limestone Bancorp that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.