Evaluating Cathay General Bancorp (CATY)’s Valuation After Q3 Revenue Beat, EPS Miss and Analyst Target Hike
Cathay General Bancorp (CATY) just delivered third quarter results with revenue coming in ahead of expectations even as earnings per share slipped a bit, and the update arrives alongside a fresh insider stock sale.
See our latest analysis for Cathay General Bancorp.
The share price at $49.8 has quietly gained momentum, with a 1 month share price return of 5.82 percent and a solid 3 year total shareholder return of 26.92 percent, suggesting steady, if unspectacular, compounding despite the latest insider sale.
If Cathay’s steady climb has you thinking about what else could offer long term compounding, now is a good time to explore fast growing stocks with high insider ownership.
With earnings growing steadily and the stock trading just below analyst targets, yet at a large implied intrinsic discount, is Cathay General Bancorp still flying under the radar or is the market already pricing in its next leg of growth?
Most Popular Narrative: 4.6% Undervalued
With Cathay General Bancorp last closing at $49.8 against a narrative fair value near $52.2, the story leans modestly in favor of undervaluation and hinges on a few key performance drivers.
The continued economic expansion and commercial activity in urban regions where Cathay General operates is driving demand for both commercial and CRE loans, which is reflected in the upward revision of loan growth guidance and is likely to positively impact top line revenue and net interest income.
Want to see how steady loan growth, shifting margins, and a re rated earnings multiple combine into that fair value signal? The narrative outlines a detailed earnings roadmap, incorporates disciplined capital returns, and still assumes a valuation level below many regional peers. Curious which specific growth and profitability assumptions have to align for that price to make sense? Read on to unpack the full framework behind this call.
Result: Fair Value of $52.2 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent commercial real estate pressure and rising nonperforming loans could quickly overwhelm steady loan growth and margin gains if conditions deteriorate further.
Find out about the key risks to this Cathay General Bancorp narrative.
Build Your Own Cathay General Bancorp Narrative
If you see the outlook differently or want to test your own assumptions against the numbers, you can build a custom narrative in just a few minutes: Do it your way.
A great starting point for your Cathay General Bancorp research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
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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.
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