July 25, 2024
Top 10 Stock SVB Financial Strong Buy Recommendation
How to read the ranks
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.
Snapshot: SVB Financial – Top 10 Stock in Dow Jones U.S. Regional Banks Index
SVB Financial is listed as a top 10 stock on July 25, 2024 in the market index D.J. US Banks because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for SVB Financial on July 25, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | NASDAQ, D.J. US Banks, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View SVB Financial Strong Buy
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 87 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock SVB Financial are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for SVB Financial. The consolidated Value Rank has an attractive rank of 85, which means that the share price of SVB Financial is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 85% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 87. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 8. Professional investors are more confident in 92% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, SVB Financial is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 85), above-average growth (Growth Rank of 61), and safe financing practices (Safety Rank of 87), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 8), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of SVB Financial is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for SVB Financial negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock SVB Financial is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for SVB Financial. Analyst Opinions are at a rank of 82 (better than 82% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in SVB Financial. But Market Pulse has a low rank of 1, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 99% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 4, which means that, currently, professional investors hold less stock in this company than in 96% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 8 (less encouraging than 92% compared with investment alternatives), SVB Financial has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: SVB Financial Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 85 (better than 85% compared with alternatives) for 2024, SVB Financial shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for SVB Financial. Price-to-Sales (P/S) is 100, which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value regarding SVB Financial's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 100% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 100. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than SVB Financial (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 85, is a buy recommendation based on SVB Financial's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: SVB Financial Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), SVB Financial shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for SVB Financial. Sales Growth has a rank of 89 which means that currently, professionals expect the company to grow more than 89% of its competitors. Capital Growth is also above 49% of competitors with a rank of 61. But Profit Growth only has a rank of 49, which means that currently professionals expect the company to grow its profits less than 51% of its competitors. And Stock Returns have also been below average with a rank of only 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: SVB Financial Debt Financing Safety very solid
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 4 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 87 |
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ANALYSIS: With an Obermatt Safety Rank of 87 (better than 87% compared with alternatives) for 2024, the company SVB Financial has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of SVB Financial 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 SVB Financial. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 92, meaning the company generates more profit to service its debt than 92% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 4, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 87 (better than 87% compared with alternatives), SVB Financial has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for SVB Financial. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: SVB Financial Top Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), SVB Financial (Regional Banks, USA) shares have much better financial characteristics than comparable stocks. Shares of SVB Financial are a good value (attractively priced) with a consolidated Value Rank of 85 (better than 85% of alternatives), show above-average growth (Growth Rank of 61), and are safely financed (Safety Rank of 87), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on SVB Financial's financial characteristics. As the company SVB Financial's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 85), above-average growth (Obermatt Growth Rank of 61), and indicate that the company is safely financed (Obermatt Safety Rank of 87), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of SVB Financial. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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