Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is considered a high growth stock. However its last closing price of $29.16 left investors wondering whether this growth has already been factored into the share price. Let’s take a look at some key metrics to determine whether there’s any value here for current and potential future investors.
Has the SBCF train has slowed down?
Seacoast Banking of Florida is poised for extremely high earnings growth in the near future. Expectations from 6 analysts are extremely bullish with earnings per share estimated to surge from current levels of $1.362 to $2.398 over the next three years. On average, this leads to a growth rate of 30.54% each year, which signals a market-beating outlook in the upcoming years.
Can SBCF’s share price be justified by its earnings growth?
SBCF is trading at price-to-earnings (PE) ratio of 21.41x, which suggests that Seacoast Banking of Florida is overvalued based on current earnings compared to the banks industry average of 16.29x , and overvalued compared to the US market average ratio of 18.37x . This multiple is a median of profitable companies of 25 Banks companies in US including Great Basin Financial, CIB Marine Bancshares and Citizens Commerce Bancshares.
After looking at SBCF’s value based on current earnings, we can see it seems overvalued relative to other companies in the industry. But, seeing as Seacoast Banking of Florida is perceived as a high-growth stock, we must also account for its earnings growth, which is captured in the PEG ratio. A PE ratio of 21.41x and expected year-on-year earnings growth of 30.54% give Seacoast Banking of Florida a very low PEG ratio of 0.70x. Based on this growth, Seacoast Banking of Florida’s stock can be considered relatively cheap , based on fundamental analysis.
What this means for you:
SBCF’s current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you’re a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:
- Financial Health: Is SBCF’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Past Track Record: Has SBCF been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of SBCF’s historicals for more clarity.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.