Market forces rained on the parade of Community West Bancshares (NASDAQ:CWBC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from Community West Bancshares' five analysts is for revenues of US$122m in 2024 which - if met - would reflect a huge 43% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 42% to US$0.72. Previously, the analysts had been modelling revenues of US$140m and earnings per share (EPS) of US$1.40 in 2024. Indeed, we can see that the analysts are a lot more bearish about Community West Bancshares' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Community West Bancshares

Analysts made no major changes to their price target of US$23.75, suggesting the downgrades are not expected to have a long-term impact on Community West Bancshares' valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Community West Bancshares' rate of growth is expected to accelerate meaningfully, with the forecast 105% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Community West Bancshares to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Community West Bancshares.

That said, the analysts might have good reason to be negative on Community West Bancshares, given its declining profit margins. Learn more, and discover the 2 other flags we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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