Bullish: Analysts Just Made A Huge Upgrade To Their First Internet Bancorp (NASDAQ:INBK) Forecasts

Simply Wall St
·3 min read

Shareholders in First Internet Bancorp (NASDAQ:INBK) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on First Internet Bancorp too, with the stock up 31% to US$23.13 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the consensus from five analysts covering First Internet Bancorp is for revenues of US$81m in 2021, implying a measurable 3.1% decline in sales compared to the last 12 months. Per-share earnings are expected to jump 28% to US$3.32. Prior to this update, the analysts had been forecasting revenues of US$71m and earnings per share (EPS) of US$2.07 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for First Internet Bancorp

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With these upgrades, we're not surprised to see that the analysts have lifted their price target 40% to US$31.40 per share. 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 First Internet Bancorp analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$25.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await First Internet Bancorp shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 3.1% revenue decline a notable change from historical growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.4% next year. It's pretty clear that First Internet Bancorp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at First Internet Bancorp.

Better yet, our automated discounted cash flow calculation (DCF) suggests First Internet Bancorp could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

This article by Simply Wall St is general in nature. 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.

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