Sierra Bancorp (BSRR) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

Analysts' growing optimism on the earnings prospects of this parent company of Bank of the Sierra is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Sierra Bancorp, as there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

The company is expected to earn $0.73 per share for the current quarter, which represents a year-over-year change of +7.35%.

Over the last 30 days, the Zacks Consensus Estimate for Sierra Bancorp has increased 18.15% because three estimates have moved higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $2.58 per share represents a change of +9.32% from the year-ago number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Sierra Bancorp. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 5.41%.

Favorable Zacks Rank

The promising estimate revisions have helped Sierra Bancorp earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Sierra Bancorp shares have added 43.5% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.