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On Tuesday, Piper Sandler analyst Andrew Liesch adjusted the price target for Community West Bancshares (NASDAQ:CWBC) to $19.00 from the previous target of $22.00. The stock, currently trading at $15.98, sits near its 52-week low of $15.57, significantly below its high of $22.89. Despite this reduction, the firm maintains an Overweight rating on the bank’s stock. According to InvestingPro analysis, the stock appears overvalued at current levels, despite the recent price decline.
Community West Bancshares, with a market capitalization of $304.59 million, reported their first quarter earnings for 2025, with earnings per share (EPS) of $0.44. After accounting for modest merger charges and other nonrecurring expenses, Piper Sandler calculated a core EPS of $0.46. This figure fell short of Piper Sandler’s estimate by $0.05 but exceeded the consensus from other analysts by $0.04. InvestingPro data reveals strong revenue growth of 18.58% over the last twelve months, suggesting resilient business fundamentals.
The lower-than-expected results were attributed to several factors. Higher expenses than anticipated contributed a $0.03 shortfall, while net interest income (NII) was $0.01 below Piper Sandler’s projections. The bank’s net interest margin did see an increase of 9 basis points, reaching 4.04%, which was slightly under Piper Sandler’s expectation of 4.05%. Fee income also did not meet Piper Sandler’s forecast by $0.01.
Community West Bancshares recorded a negative provision of $41,000 for the quarter, which was more favorable than Piper Sandler’s prediction of a $150,000 provision, reflecting a $0.01 difference. The bank continued to show strong credit metrics, which supported the negative provision. Additionally, a higher tax rate than Piper Sandler forecasted impacted the EPS by one cent.
The new price target of $19.00 takes into account these various financial metrics from the first quarter of 2025, as well as the ongoing operational aspects of Community West Bancshares.
In other recent news, Community West Bancshares reported its first quarter of 2025 results, showing a mixed financial performance. The company’s net interest income and provisioning exceeded expectations, while expenses were higher than anticipated. The net interest margin improved by 9 basis points to 4.04%, with expectations for continued gradual improvement. Analysts from Keefe, Bruyette & Woods adjusted the stock’s price target from $21.00 to $19.00, maintaining a Market Perform rating. Raymond (NSE:RYMD) James also kept a Market Perform rating, noting the bank’s solid loan growth and core deposit strengthening. Community West Bancshares is actively engaged in merger and acquisition discussions, which is a priority for capital deployment. Additionally, the bank appointed Hinson M. Thomas as the new Chief Credit Officer, following the resignation of Patrick A. Luis. The company revamped executive contracts, updating compensation and benefits for several officers, as detailed in a recent SEC filing.
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