Fact based stock research
Stellar Bancorp (NasdaqGS:CBTX)

US12481V1044

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Stellar Bancorp stock research in summary

ir.cbtxinc.com

ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Stellar Bancorp (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of Stellar Bancorp are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives) and show below-average growth (Growth Rank of 17) but are safely financed (Safety Rank of 62), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Stellar Bancorp's financial characteristics. As the company Stellar Bancorp's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 21) and low growth (Obermatt Growth Rank of 17), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 62) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	21
Growth Rank	17
Safety Rank	62
Combined Rank	8

Country	USA
Industry	Regional Banks
Index	Sound Pay USA, NASDAQ
Size class	Medium

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Stellar Bancorp

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	23	21	21	21
GROWTH
GROWTH	44	58	74	17
SAFETY
SAFETY	69	89	15	62
SENTIMENT
SENTIMENT	n/a	21	27	^new
360° VIEW
360° VIEW	n/a	45	14	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Stellar Bancorp is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	23	21	21	21
GROWTH
GROWTH	44	58	74	17
SAFETY
SAFETY	69	89	15	62
COMBINED
COMBINED	38	64	17	8

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Stellar Bancorp the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Stellar Bancorp shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Stellar Bancorp. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 63, which means that the stock price is lower compared with invested capital than for 63% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 33 which means the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning Stellar Bancorp's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 63 and for the dividend yields rank which is lower than for 70% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Stellar Bancorp's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Stellar Bancorp, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	27	68	34	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	20	5	30	11
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	45	30	51	63
DIVIDEND YIELD
DIVIDEND YIELD	33	29	32	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	23	21	21	21

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Stellar Bancorp; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Stellar Bancorp shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Stellar Bancorp. While Profit Growth has a good rank of 50, as professionals currently expect the company to grow its profits more than 50% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 16, which means that currently professionals expect the company to grow less than 84% of its competitors, while Capital Growth has a rank of 49 and Stock Returns have been below market median, with a rank of 25 (75% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	52	98	6	16
PROFIT GROWTH
PROFIT GROWTH	n/a	71	100	50
CAPITAL GROWTH
CAPITAL GROWTH	n/a	20	100	49
STOCK RETURNS
STOCK RETURNS	31	23	55	25
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	44	58	74	17

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Stellar Bancorp.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 62 (better than 62% compared with alternatives), the company Stellar Bancorp has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Stellar Bancorp is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Stellar Bancorp. Refinancing is at 59, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is also good at 78, meaning the company generates more profit to service its debt than 78% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 40, which means the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 62 (better than 62% compared with alternatives), Stellar Bancorp has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Stellar Bancorp could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Stellar Bancorp and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	84	62	28	40
REFINANCING
REFINANCING	24	36	67	59
LIQUIDITY
LIQUIDITY	72	100	1	78
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	69	89	15	62

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Stellar Bancorp and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	1	64	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	21	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	68	47	^new
MARKET PULSE
MARKET PULSE	n/a	18	44	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	21	27	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Stellar Bancorp.
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