Surging Earnings Estimates Signal Upside for Third Coast Bancshares (TCBX) Stock

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, October 29th:

Iamgold IAG: This international gold exploration and mining company based in Canada, has a Zacks Rank #1(Strong Buy), and witnessed the Zacks Consensus Estimate for its cuurent year earnings increasing 35.9% over the last 60 days.

Iamgold Corporation Price and Consensus

Iamgold Corporation price-consensus-chart | Iamgold Corporation Quote

Iamgold’ shares gained 43.0% over the last three month compared with the S&P 500’s gain of 6.5%. The company possesses a Momentum Score of A.

Iamgold Corporation Price

Iamgold Corporation price | Iamgold Corporation Quote

Third Coast Bancshares TCBX This commercially focused, bank holding company operating primarily in the Greater Houston, Dallas-Fort Worth and Austin-San Antonio markets, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.1% over the last 60 days.

Third Coast Bancshares, Inc. Price and Consensus

Third Coast Bancshares, Inc. price-consensus-chart | Third Coast Bancshares, Inc. Quote

Third Coast Bancshares’ shares gained 37.7% over the last three month compared with the S&P 500’s gain of 6.5%. The company possesses a Momentum Score of A.

Third Coast Bancshares, Inc. Price

Third Coast Bancshares, Inc. price | Third Coast Bancshares, Inc. Quote

FinWise Bancorp FINW This bank holding company headquartered in Murray, Utah is a lender to and takes deposits from consumers and small businesses, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.6% over the last 60 days.

FinWise Bancorp Price and Consensus

FinWise Bancorp price-consensus-chart | FinWise Bancorp Quote

FinWise Bancorp’ shares gained 33.4% over the last three month compared with the S&P 500’s gain of 6.5%. The company possesses a Momentum Score of A.

FinWise Bancorp Price

FinWise Bancorp price | FinWise Bancorp Quote

See the full list of top ranked stocks here

Learn more about the Momentum score and how it is calculated here.

Zacks Investment Research

Have you been paying attention to shares of Third Coast Bancshares, Inc. (TCBX)? Shares have been on the move with the stock up 22.5% over the past month. The stock hit a new 52-week high of $33.42 in the previous session. Third Coast Bancshares, Inc. has gained 65.1% since the start of the year compared to the 20.6% move for the Zacks Finance sector and the 16.5% return for the Zacks Banks - Southeast industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 23, 2024, Third Coast Bancshares reported EPS of $0.74 versus consensus estimate of $0.53.

For the current fiscal year, Third Coast Bancshares is expected to post earnings of $2.46 per share on $168.55 million in revenues. This represents a 24.24% change in EPS on a 14.09% change in revenues. For the next fiscal year, the company is expected to earn $2.69 per share on $184 million in revenues. This represents a year-over-year change of 9.17% and 9.17%, respectively.

Valuation Metrics

Third Coast Bancshares may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Third Coast Bancshares has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 13.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 13X. On a trailing cash flow basis, the stock currently trades at 14.4X versus its peer group's average of 10.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Third Coast Bancshares currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Third Coast Bancshares passes the test. Thus, it seems as though Third Coast Bancshares shares could have a bit more room to run in the near term.

Zacks Investment Research