July 25, 2024
Top 10 Stock Texas Capital Bancshares Sell 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: Texas Capital Bancshares – Top 10 Stock in Dow Jones U.S. Regional Banks Index
Texas Capital Bancshares 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. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 4 (4% performer), Obermatt issues an overall sell recommendation for Texas Capital Bancshares on July 25, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | Diversity USA, NASDAQ, D.J. US Banks, S&P MIDCAP |
| 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 Texas Capital Bancshares Sell
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| SENTIMENT | ||||||||
| SENTIMENT | 4 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock Texas Capital Bancshares are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Texas Capital Bancshares. The only rank that is above average is the consolidated Safety Rank at 61, which means that the company has a financing structure that is safer than those of 61% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 24, which means that the share price of Texas Capital Bancshares is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 7, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 4, which means that professional investors are more pessimistic about the stock than for 96% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, Texas Capital Bancshares is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that Texas Capital Bancshares shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 4. The negative market view on Texas Capital Bancshares may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Texas Capital Bancshares negative
ANALYSIS: With an Obermatt Sentiment Rank of 4 (better than 4% compared with alternatives), overall professional sentiment and engagement for the stock Texas Capital Bancshares is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Texas Capital Bancshares. Analyst Opinions are at a rank of 5 (worse than 95% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 5, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 1, which means that professional investors hold less stock in this company than in 99% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Texas Capital Bancshares is Market Pulse, with a rank of 89, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 89% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 4 (less encouraging than 96% compared with investment alternatives), Texas Capital Bancshares has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Texas Capital Bancshares Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 24 (worse than 76% compared with alternatives), Texas Capital Bancshares shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Texas Capital Bancshares. Price-to-Sales (P/S) is 66, which means that the stock price compared with what market professionals expect for future sales is lower than for 66% of comparable companies, indicating a good value concerning Texas Capital Bancshares's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 63% of alternatives (37% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 7, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 24, is a sell recommendation based on Texas Capital Bancshares's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Texas Capital Bancshares may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Texas Capital Bancshares Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Texas Capital Bancshares 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 all four metrics below average for Texas Capital Bancshares. Sales Growth has a rank of 46, which means that currently professionals expect the company to grow less than 54% of its competitors. The same is valid for Profit Growth, with a rank of 37, and Capital Growth with 17. In addition, Stock Returns have a below market rank of 5, which means that the stock returns have recently been below 95% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 7, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Texas Capital Bancshares Debt Financing Safety above-average
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 87 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 61 |
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ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Texas Capital Bancshares 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 Texas Capital Bancshares 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 just one indicator above average for Texas Capital Bancshares and the other two below average. Refinancing is at 87, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 87% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 40, meaning the company generates less profit to service its debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Texas Capital Bancshares has a financing structure that is safer 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 Texas Capital Bancshares 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. ...read more
Combined financial peformance: Texas Capital Bancshares Lowest Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| COMBINED | ||||||||
| COMBINED | 8 |
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ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Texas Capital Bancshares (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of Texas Capital Bancshares are low in value (priced high) with a consolidated Value Rank of 24 (worse than 76% of alternatives) and show below-average growth (Growth Rank of 7) but are safely financed (Safety Rank of 61), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Texas Capital Bancshares's financial characteristics. As the company Texas Capital Bancshares's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 24) and low growth (Obermatt Growth Rank of 7), 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 61) 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. ...read more
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