Summary
- Eagle Bancorp is a profitable growing company with expanding margins, but the forecasts are for slowed growth.
- The company’s co-founder and CEO recently retired due to ill health.
- Eagle Bancorp’s new CEO has reinstated the company’s dividend payment in an attempt to regain the markets confidence.
Eagle Bancorp, Inc. (NASDAQ:EGBN) has a history of solid growth and operates profitably in the banking industry. The stock is reasonably priced, but has been stuck in a trading range since late 2017 as the market lost confidence in the company. The stock could be suitable for patient investors, but I will wait for the uncertainty surrounding the company to clear.
Financials
Eagle Bancorp has shown solid growth over the last decade with its revenue increasing 15% per year over the last decade. The company's margins have expanded, with its profit margin increasing from 10% up to 45% and its return on equity increasing from 6% up to 14%. The company's total liabilities represent 87% of its total asset value which is normal for financial based companies such as banks.
Eagle Bancorp's 2020 forward PE multiple is 10.7x with a stock price of $53. The company's trailing PE multiple is 12.1x and its book value multiple is 1.6x. The average trailing PE for its industry is 10.9x (based on csimarket.com data for the Regional Banks industry) which means that Eagle Bancorp's trailing PE of 12.1x is more than its industry average.
The chart below visually shows Eagle Bancorp's revenue and earnings trend over the last decade along with the next two years of consensus forecasts.
Eagle Bancorp data by ADVFN
As the above chart shows, Eagle Bancorp's revenue has generally increased over the last decade and the forecasts show this trend continuing into 2020. The company's earnings have trended higher with a strong result booked for 2018. The analysts are expecting the company's earnings to increase slightly in 2019 (after its strong 2018 result) and to continue increasing in 2020.
Over the last decade, Eagle Bancorp's revenue has increased at an average rate of 15% per year and its earnings have increased at an average rate of 26% per year.
