Republic Bancorp (RBCA.A) Valuation Check After 11% Revenue Growth and a Modest Earnings Miss

Republic Bancorp (RBCA.A) just posted an 11% year on year revenue jump, and that steady top line growth is quietly shaping how investors view the stock after a modest earnings miss.

See our latest analysis for Republic Bancorp.

That 11% revenue lift seems to be stabilising sentiment, with the stock’s recent 1 month share price return of 4.01% contrasting with a softer 1 year total shareholder return of negative 6.73%, after an otherwise strong multiyear run.

If Republic Bancorp’s steady progress has you thinking about other financial ideas, this could be a good moment to explore fast growing stocks with high insider ownership for fresh, higher growth candidates with skin in the game.

With solid long term returns, a recent pullback, and shares trading below both analyst targets and some intrinsic estimates, is Republic Bancorp quietly undervalued here? Or is the market already pricing in its next leg of growth?

Price-to-Earnings of 10.6x: Is it justified?

On valuation, Republic Bancorp trades on a 10.6x price to earnings ratio versus peers and its own estimated fair multiple, even as the stock sits at $69.07.

The price to earnings multiple compares the current share price to the last twelve months of earnings, a core yardstick for profitable banks where steady earnings power matters. For Republic Bancorp, a 10.6x multiple sits below both the US Banks industry average of 11.7x and direct peer averages of 13.2x, hinting that the market is not paying up for its profitability in the same way.

That discount stands in contrast to our DCF work, which points to a fair value of $109.46 per share and suggests today’s earnings multiple could be overly conservative if cash flows remain resilient. However, relative to the estimated fair price to earnings ratio of 9.3x, the current 10.6x implies investors may already be baking in a modest premium above what our fair ratio framework indicates the market could ultimately gravitate toward.

Against the broader US Banks sector, Republic Bancorp’s lower price to earnings ratio underscores a clear relative value gap, especially given its 25% earnings growth over the past year beating the industry’s 18.2%. If the market starts to re rate the name closer to peer or fair ratio levels, the current multiple could be a starting point rather than the destination.

Explore the SWS fair ratio for Republic Bancorp

Result: Price-to-Earnings of 10.6x (UNDERVALUED)

However, investors should watch slowing annual revenue growth and recent net income contraction, as sustained pressure in these areas could undermine the valuation catch up story.

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

Another View: SWS DCF Suggests Deeper Value

Our DCF model paints a starker picture, putting Republic Bancorp’s fair value at $109.46 per share versus today’s $69.07, a 36.9% discount. If cash flows hold up, that is a sizable valuation gap. The question is whether markets are right to be this cautious on future earnings.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Republic Bancorp for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 906 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Republic Bancorp Narrative

If you see the numbers differently or want to dig into the data yourself, you can build a complete view in minutes: Do it your way.

A great starting point for your Republic Bancorp research is our analysis highlighting 3 key rewards and 1 important warning sign 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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