Nicolet Bankshares (NIC): Evaluating Valuation After CEO Mike Daniels’ Leadership Extension and New Equity Award

Nicolet Bankshares (NIC) announced that Chairman, President, and CEO Mike Daniels will continue leading the company through 2030. The board also approved a sizable equity award tied to his ongoing performance and service.

See our latest analysis for Nicolet Bankshares.

After a choppy few months, Nicolet Bankshares’ 18.1% share price return year-to-date stands out. Its one-year total shareholder return of 9.5% and three-year gain of 56% suggest investors are rewarding both stable leadership and consistent results. Recent moves, such as extending the CEO’s tenure and granting performance-based equity, may be boosting confidence in long-term growth.

If you're interested in identifying other companies with standout leadership and growth stories, this is the perfect moment to broaden your horizons and discover fast growing stocks with high insider ownership

But with shares still trading about 28% below analyst targets and at a nearly 50% discount to estimated fair value, is this a rare opportunity to buy into a growing regional bank, or is the market already factoring in the gains ahead?

Price-to-Earnings of 12.4x: Is it justified?

Nicolet Bankshares is currently trading at a price-to-earnings (P/E) ratio of 12.4x, higher than the US Banks industry average of 11.2x, but below the peer group’s average of 13.1x. Shares closed at $121.66, reflecting a premium compared to most competitors in the sector.

The price-to-earnings ratio measures how much investors are willing to pay for each dollar of the company’s past or expected earnings, and is a favored benchmark in the banking industry, where profit generation is often consistent and regulated. A higher multiple generally implies the market expects robust growth or high-quality earnings ahead.

In Nicolet Bankshares’ case, the slightly elevated P/E multiple could be interpreted as a sign that investors are pricing in continued growth, quality earnings, and above-market returns. The valuation is also supported by a fair P/E estimate of 16.9x, which suggests the market could eventually reward stronger performance with a higher multiple.

Comparatively, Nicolet Bankshares stands out not only for its faster earnings growth but also for trading below both its fair multiple and peer averages. This leaves room for further re-rating if financial results keep beating expectations and could attract investors seeking value in a scenario where fundamentals remain solid.

Explore the SWS fair ratio for Nicolet Bankshares

Result: Price-to-Earnings of 12.4x (ABOUT RIGHT)

However, slower revenue or profit growth in coming quarters could challenge these optimistic assumptions and lead investors to reassess the stock’s premium valuation.

Find out about the key risks to this Nicolet Bankshares narrative.

Another View: Discounted Cash Flow Model

Looking through another lens, the SWS DCF model estimates Nicolet Bankshares’ fair value at $242.17, almost double its current price. This suggests shares could be significantly undervalued if all future cash flows play out as expected. Which view best reflects reality? Is it a justified market discount, or a rare long-term bargain?

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 Nicolet Bankshares 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 919 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 Nicolet Bankshares Narrative

If you think there’s another angle to the Nicolet Bankshares story, it’s easy to dive into the numbers and assemble your own perspective in just a few minutes. So why not Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Nicolet Bankshares.

Looking for more investment ideas?

Take charge of your financial goals and unlock top opportunities by targeting stocks with the stories and potential to reshape your portfolio, all powered by Simply Wall Street’s screeners.

• Uncover growth potential and strong fundamentals by browsing these 3592 penny stocks with strong financials that have caught the attention of savvy investors seeking tomorrow’s leaders.
• Capture reliable income streams and impressive yields as you review these 15 dividend stocks with yields > 3% selected for solid returns and financial resilience.
• Position yourself at the forefront of innovation by reviewing these 26 AI penny stocks leading advances in artificial intelligence and practical applications.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com