A History of Outperforming Analyst Forecasts and Beating the Odds: SVB Financial Group (SIVB)

SVB Financial Group (NASDAQ: SIVB) stock jumped 16.56% on Friday to $291.44 against a previous-day closing price of $250.04. With 3.09 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.19 million shares. During the session, the Banks – Regional company that operates in wider Financial sector, reached to the highest price of $305.67 whereas the lowest price it dropped to was $274.30. The 52-week range on SIVB shows that it touched its highest point at $674.35 and its lowest point at $198.10 during that stretch. It currently has a 1-year price target of $285.04. Beta for the stock currently stands at 1.48.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SIVB was up-trending over the past week, with a rise of 14.82%, but this was up by 38.52% over a month. Three-month performance dropped to -7.59% while six-month performance fell -33.18%. The stock lost -55.51% in the past year, while it has gained 26.64% so far this year. A look at the trailing 12-month EPS for SIVB yields 25.35 with Next year EPS estimates of 24.80. For the next quarter, that number is 4.62. This implies an EPS growth rate of 36.60% for this year and 24.92% for next year. EPS is expected to grow by 8.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 33.70%.

Float and Shares Shorts:

At present, 59.10 million SIVB shares are outstanding with a float of 58.77 million shares on hand for trading. On Oct 13, 2022, short shares totaled 2.57 million, which was 4.35% higher than short shares on Sep 14, 2022. In addition to Mr. Gregory W. Becker as the firm’s Pres, CEO & Director, Mr. Daniel J. Beck serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 93.91% of SIVB’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.29% of SIVB, in contrast to 44.17% held by mutual funds. Shares owned by individuals account for 1.60%. As the largest shareholder in SIVB with 10.59% of the stake, The Vanguard Group, Inc. holds 6,259,803 shares worth 6,259,803. A second-largest stockholder of SIVB, SSgA Funds Management, Inc., holds 3,077,777 shares, controlling over 5.21% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SIVB, holding 2,980,871 shares or 5.04% stake. With a 3.04% stake in SIVB, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 1,796,181 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.33% of SIVB stock, is the second-largest Mutual Fund holder. It holds 1,374,357 shares valued at 316.29 million. Vanguard 500 Index Fund holds 2.31% of the stake in SIVB, owning 1,366,170 shares worth 314.41 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SIVB since 24 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SIVB analysts setting a high price target of $600.00 and a low target of $190.00, the average target price over the next 12 months is $284.56. Based on these targets, SIVB could surge 105.87% to reach the target high and fall by -34.81% to reach the target low. Reaching the average price target will result in a decline of -2.36% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SIVB will report FY 2023 earnings on 01/18/2024. Analysts have provided yearly estimates in a range of $34.10 being high and $15.87 being low. For SIVB, this leads to a yearly average estimate of $19.95. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. SVB Financial Group surprised analysts by -$0.67 when it reported $4.62 EPS against a consensus estimate of $5.29. The surprise factor in the prior quarter was $0.12. Based on analyst estimates, the high estimate for the next quarter is $5.61 and the low estimate is $3.73. The average estimate for the next quarter is thus $4.68.

Summary of Insider Activity:

Insiders traded SIVB stock several times over the past three months with 8 Buys and 7 Sells. In these transactions, 4,083 shares were bought while 3,379 shares were sold. The number of buy transactions has increased to 71 while that of sell transactions has risen to 105 over the past year. The total number of shares bought during that period was 33,934 while 63,969 shares were sold.

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