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).

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

First Merchants stock research in summary

ir.firstmerchants.com

ANALYSIS: With an Obermatt Combined Rank of 11 (worse than 89% 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 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 19), and are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 11, 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 61) but low growth (Obermatt Growth Rank of 19) and risky financing practices (Obermatt Safety Rank of 25), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 61% 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	61
Growth Rank	19
Safety Rank	25
Combined Rank	11

Country	USA
Industry	Regional Banks
Index	Sound Pay USA, NASDAQ
Size class	XX-Large

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

Further information

Multiple opinions. One number.

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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	61
GROWTH
GROWTH	46	28	72	19
SAFETY
SAFETY	59	31	49	25
SENTIMENT
SENTIMENT	n/a	94	99	^new
360° VIEW
360° VIEW	n/a	59	83	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-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	61
GROWTH
GROWTH	46	28	72	19
SAFETY
SAFETY	59	31	49	25
COMBINED
COMBINED	65	18	73	11

Last update of combined financial performance: 14-Nov-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 61 (better than 61% 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 62 which means that the stock price compared with what market professionals expect for future profits is lower than for 62% 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 60, and for Dividend Yield with a Dividend Yield Rank of 71. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 63% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 37). 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 61, 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	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	57	56	66	62
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	65	56	64	60
DIVIDEND YIELD
DIVIDEND YIELD	59	57	61	71
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	58	59	61	61

Last update of Value Rank: 14-Nov-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 19 (better than 19% 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 half of the indicators below and half above average for First Merchants. Capital Growth has a rank of 61, which means that currently professionals expect the company to grow its invested capital more than 18% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has only a rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Profit Growth is also low at a rank of 18. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for First Merchants, investors may want to look at value and sentiment indicators for a well-rounded picture of this 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 mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	45	74	37	10
PROFIT GROWTH
PROFIT GROWTH	86	44	78	18
CAPITAL GROWTH
CAPITAL GROWTH	n/a	41	75	61
STOCK RETURNS
STOCK RETURNS	55	9	43	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	46	28	72	19

Last update of Growth Rank: 14-Nov-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 25 (better than 25% compared with alternatives), the company First Merchants has financing practices on the riskier side, which means that their overall debt burden is 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 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 44, meaning the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. Liquidity is also on the riskier side with a rank of 17, meaning the company generates less profit to service its debt than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), First Merchants has a financing structure that is 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	44
REFINANCING
REFINANCING	59	47	65	63
LIQUIDITY
LIQUIDITY	76	38	33	17
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	31	49	25

Last update of Safety Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for First Merchants.
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