Are Options Traders Betting on a Big Move in ConnectOne Bancorp (CNOB) Stock?

For the quarter ended September 2024, ConnectOne Bancorp (CNOB) reported revenue of $65.62 million, down 0.5% over the same period last year. EPS came in at $0.42, compared to $0.51 in the year-ago quarter.

The reported revenue compares to the Zacks Consensus Estimate of $67.87 million, representing a surprise of -3.31%. The company delivered an EPS surprise of -6.67%, with the consensus EPS estimate being $0.45.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how ConnectOne performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Efficiency Ratio: 57% versus the two-analyst average estimate of 55.9%.
• Net Interest Margin (GAAP): 2.7% compared to the 2.8% average estimate based on two analysts.
• Average Balance - Total interest-earning assets: $9.21 billion versus $9.23 billion estimated by two analysts on average.
• Deposit, loan and other income: $1.82 million versus $1.85 million estimated by two analysts on average.
• Net Interest Income (tax equivalent basis): $61.71 million versus the two-analyst average estimate of $64.33 million.
• Net gains on sale of loans held-for-sale: $0.34 million versus $0.89 million estimated by two analysts on average.
• Income on bank owned life insurance: $2.15 million versus the two-analyst average estimate of $1.86 million.
• Total Noninterest Income: $4.74 million versus $4.09 million estimated by two analysts on average.

View all Key Company Metrics for ConnectOne here>>>

Shares of ConnectOne have returned +4.6% over the past month versus the Zacks S&P 500 composite's +1.5% change. The stock currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term.

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ConnectOne Bancorp (CNOB) came out with quarterly earnings of $0.42 per share, missing the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -6.67%. A quarter ago, it was expected that this holding company for ConnectOne Bank would post earnings of $0.40 per share when it actually produced earnings of $0.46, delivering a surprise of 15%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

ConnectOne, which belongs to the Zacks Banks - Northeast industry, posted revenues of $65.62 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.31%. This compares to year-ago revenues of $65.92 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

ConnectOne shares have added about 11.1% since the beginning of the year versus the S&P 500's gain of 21.5%.

What's Next for ConnectOne?

While ConnectOne has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for ConnectOne: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.49 on $70.14 million in revenues for the coming quarter and $1.78 on $268.12 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Esquire Financial Holdings, Inc. (ESQ), another stock in the same industry, has yet to report results for the quarter ended September 2024.

This company is expected to post quarterly earnings of $1.32 per share in its upcoming report, which represents a year-over-year change of +12.8%. The consensus EPS estimate for the quarter has been revised 0.7% higher over the last 30 days to the current level.

Esquire Financial Holdings, Inc.'s revenues are expected to be $31.48 million, up 11.4% from the year-ago quarter.

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