Hope Bancorp (HOPE): Assessing Valuation After Raised 2025 Guidance and Strengthened Quarterly Results

Hope Bancorp (HOPE) just reported third quarter results showing higher net interest income and net income compared to the same period last year. In addition, the bank affirmed its quarterly dividend and updated guidance for 2025.

See our latest analysis for Hope Bancorp.

With the share price of Hope Bancorp currently at $10.56, recent guidance for higher loan and net interest income in 2025 appears to have sparked interest, even as the 1-year total shareholder return remains at -9.24%. While quarterly fundamentals have shown improvement, the stock’s longer-term five-year total shareholder return is much brighter at 43.07%, reflecting momentum that has come in waves rather than a straight line.

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With shares still trading at a notable discount to analyst price targets despite guidance pointing toward rising income, is there a real buying opportunity here? Or is the market already pricing in Hope Bancorp’s next phase of growth?

Most Popular Narrative: 13.8% Undervalued

Hope Bancorp's prevailing narrative values shares notably higher than the recent close of $10.56, focusing on potential upside that has caught market attention. This fair value is based on high expectations for business transformation and future earnings power, making the optimism hard to ignore.

Significant ongoing investment in digital platform enhancements and fintech partnerships is poised to improve operational efficiency and customer retention, which could translate into a sustainably lower cost-to-income ratio and improved net margins over time.

Read the complete narrative.

What is driving this optimistic narrative? Bold financial targets, a digital revamp, and a profit margin trajectory that is rarely seen in this sector. Curious about which key assumptions could change the outlook and whether the company can deliver on expectations? Get the inside story that is supporting this fair value.

Result: Fair Value of $12.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, concentration in commercial real estate loans or slower digital adoption could hinder Hope Bancorp’s progress. This may cast doubt over optimistic growth assumptions.

Find out about the key risks to this Hope Bancorp narrative.

Another View: Price Compared to Peers

While the optimism around earnings potential suggests HOPE is undervalued, the current price-to-earnings ratio of 28x is much higher than the US Banks industry average of 11x and also exceeds the fair ratio of 24x. This could indicate valuation risk if future results do not align with expectations. Is momentum from digital upgrades sufficient to justify a premium?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Hope Bancorp Narrative

If you see things differently or want to take a closer look at the numbers, you can easily build your own narrative in just a few minutes: Do it your way

A great starting point for your Hope Bancorp research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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