Fact based stock research
First Merchants (NasdaqGS:FRME)

US3208171096

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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).

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First Merchants stock research in summary

ir.firstmerchants.com

ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), First Merchants (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of First Merchants are a good value (attractively priced) with a consolidated Value Rank of 66 (better than 66% of alternatives) but show below-average growth (Growth Rank of 16), and are riskily financed (Safety Rank of 24), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on First Merchants's financial characteristics. As the company First Merchants's key financial metrics exhibit good value (Obermatt Value Rank of 66) but low growth (Obermatt Growth Rank of 16) and risky financing practices (Obermatt Safety Rank of 24), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 66% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. 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	66
Growth Rank	16
Safety Rank	24
Combined Rank	12

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: First Merchants

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	59	61	66
GROWTH
GROWTH	46	28	72	16
SAFETY
SAFETY	59	31	49	24
SENTIMENT
SENTIMENT	n/a	94	99	^new
360° VIEW
360° VIEW	n/a	59	83	^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 First Merchants is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	58	59	61	66
GROWTH
GROWTH	46	28	72	16
SAFETY
SAFETY	59	31	49	24
COMBINED
COMBINED	65	18	73	12

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 66 (better than 66% compared with alternatives), First Merchants shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for First Merchants. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning First Merchants's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 62, and for Dividend Yield with a Dividend Yield Rank of 72. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 65% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 35). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 66, is a buy recommendation based on First Merchants's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that First Merchants has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing First Merchants shares. 9. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	33	43	38	35
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	57	56	66	61
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	65	56	64	62
DIVIDEND YIELD
DIVIDEND YIELD	59	57	61	72
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	58	59	61	66

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 16 (better than 16% compared with alternatives), First Merchants 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 indicators below average for First Merchants. Only Capital Growth has a good rank of 62, which means that currently professionals expect the company to grow its invested capital more than 23% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 12 which means that currently professionals expect the company to grow less than 88% of its competitors. Profit Growth with a rank of 23 and Stock Returns with a rank of 36 are also low (below 64% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 16, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for First Merchants is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. 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	45	74	37	12
PROFIT GROWTH
PROFIT GROWTH	86	44	78	23
CAPITAL GROWTH
CAPITAL GROWTH	n/a	41	75	62
STOCK RETURNS
STOCK RETURNS	55	9	43	36
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	46	28	72	16

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company First Merchants has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of First Merchants is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for First Merchants and the other two below average. Refinancing is at 62, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 62% of its competitors. But Leverage is high with a rank of 45, meaning the company has an above-average debt-to-equity ratio. It has more debt than 55% of its competitors. Liquidity is also on the riskier side with a rank of 14, meaning the company generates less profit to service its debt than 86% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 24 (worse than 76% compared with alternatives), First Merchants has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for First Merchants are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with First Merchants 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	31	46	58	45
REFINANCING
REFINANCING	59	47	65	62
LIQUIDITY
LIQUIDITY	76	38	33	14
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	31	49	24

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of First Merchants 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	95	98	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	23	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	82	97	^new
MARKET PULSE
MARKET PULSE	n/a	94	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	94	99	^new

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