Commerce Bancshares (CBSH) AI Stock Analysis

• Market Cap: $7.43B
• Dividend Yield: 1.89%
• Average Volume (3M): 699.36K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.94
• Revenue Growth: -2.75%
• EPS Growth: 11.75%
• Country: US
• Employees: 4,537
• Sector: Financial
• Sector Strength: 80
• Industry: Banks - Regional
• EPS (TTM): 3.87
• Shares Outstanding: 134,074,100
• 10 Day Avg. Volume: 611,746
• 30 Day Avg. Volume: 699,356
• PEG Ratio: 1.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.05
• Price to Cash Flow (P/CF): -15.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $70.00
• Price Target Upside: 26.31% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Commerce Bancshares demonstrates strong financial performance, with robust profit margins and effective cash flow management, contributing positively to the score. The technical indicators show some bearish momentum, partially offsetting the financial strengths. Valuation metrics indicate the stock is fairly priced, with a modest dividend yield. Overall, the company's financial stability and operational efficiency strongly support the stock's appeal, though technical signals suggest caution in the short term.

Positive Factors

Deposit Pricing

Commerce outperformed peers on deposit pricing by a wide margin as the Fed raised rates, reporting a ~37% interest bearing deposit beta versus 57%.

Net Interest Margin

Net interest margin of 3.49% beat estimates and was a positive surprise despite rate cuts.

Yield Curve

A higher belly of the yield curve is positive for CBSH because of their steady cadence of fixed rate asset repricing.

Negative Factors

Loan Growth

Loan growth remains weak, affecting funding strategies despite an excess liquidity position.

Net Interest Income Path

The NII path ahead looks challenging given the $9.7B variable rate loan and limited short-term funding repricing opportunities.

Valuation Concerns

Fundamentals through 1Q25 and premium valuation leave little room for upside.

Commerce Bancshares Business Overview & Revenue Model

Company Description

Commerce Bancshares, Inc. (CBSH) is a regional bank holding company headquartered in Kansas City, Missouri. It operates through its principal subsidiary, Commerce Bank, providing a range of financial products and services, including personal banking, business banking, wealth management, and investment services. With a strong presence in the Midwest, the company is dedicated to serving individual consumers, small businesses, and commercial clients, offering customized solutions to meet diverse financial needs.

How the Company Makes Money

Commerce Bancshares generates revenue primarily through its banking operations, which include interest income from loans and investments and non-interest income from fees and services. The company earns interest income by providing various loans, such as consumer loans, commercial loans, and real estate loans, and investing in securities. Non-interest income is derived from service charges on deposit accounts, trust and asset management fees, card transaction fees, and other banking services. Additionally, Commerce Bancshares benefits from strategic partnerships and a focus on cross-selling its products to enhance customer relationships and drive earnings.

Commerce Bancshares Financial Statement Overview

Summary

Commerce Bancshares exhibits strong financial health, characterized by robust profit margins, effective revenue growth, and prudent cash flow management. The company's debt-free balance sheet and high return on equity underscore financial stability and operational efficiency. While the equity ratio suggests potential leverage considerations, the overall financial trajectory remains positive, positioning the company well within the banking industry.

Income Statement

Commerce Bancshares has demonstrated strong revenue growth, with a 6.4% increase in 2024. The gross profit margin remains robust at 100%, indicating efficient cost management. Net profit margin is solid at 35.8%, reflecting strong profitability. The significant increase in EBIT margin from 44.9% in 2023 to 98.5% in 2024 shows improved operational performance. The absence of EBITDA data in 2024 limits full margin analysis.

Balance Sheet

The balance sheet is stable with no debt in 2024, showcasing prudent financial management. The equity ratio stands at 10.3%, reflecting a moderate equity base relative to total assets. Return on equity is impressive at 15.9%, indicating effective use of shareholders' equity to generate profits. However, the relatively low equity ratio suggests that the company could be more leveraged than peers.

Cash Flow

Free cash flow grew by 44.2% from 2023 to 2024, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.1, indicating healthy cash conversion from net income. The free cash flow to net income ratio is also favorable at 1.1, underlining efficient cash utilization. However, the substantial financing cash outflows in previous years point to potential liquidity management challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.47B	1.38B	1.51B	1.43B	1.35B
	Gross Profit
1.47B	1.38B	1.51B	1.43B	1.35B
	EBIT
0.00	619.73M	677.55M	676.48M	441.35M
	EBITDA
0.00	669.24M	679.23M	731.17M	484.95M
	Net Income Common Stockholders
526.33M	477.06M	488.40M	530.76M	354.06M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.21B	2.69B	13.08B	18.73B	14.63B
	Total Assets
32.00B	31.70B	31.88B	36.69B	32.92B
	Total Debt
56.00K	1.40M	9.67M	12.56M	802.00K
	Net Debt
-748.36M	-2.68B	-831.96M	-4.26B	-2.18B
	Total Liabilities
28.66B	28.74B	29.39B	12.56M	802.00K
	Stockholders Equity
3.31B	2.94B	2.47B	3.44B	3.40B
Cash Flow		Free Cash Flow
577.86M	400.69M	494.19M	541.01M	590.86M
	Operating Cash Flow
577.86M	488.77M	559.38M	597.72M	623.99M
	Investing Cash Flow
483.79M	2.18B	242.27M	-2.08B	-5.39B
	Financing Cash Flow
-372.94M	-883.12M	-4.20B	3.57B	6.07B

Commerce Bancshares Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 55.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBSH, the sentiment is Negative. The current price of 55.42 is below the 20-day moving average (MA) of 61.01, below the 50-day MA of 63.58, and below the 200-day MA of 60.92, indicating a bearish trend. The MACD of -0.38 indicates Negative momentum. The RSI at 47.99 is Neutral, neither overbought nor oversold. The STOCH value of 46.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CBSH.

Commerce Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRME	76 Outperform	$2.09B	10.46	8.85%	3.93%	5.54%	-8.57%
CBSH	76 Outperform	$7.43B	14.32	16.67%	1.89%	-2.75%	11.75%
PB	72 Outperform	$6.14B	12.77	6.60%	3.54%	11.96%	11.66%
WBS	72 Outperform	$7.16B	9.55	8.54%	3.83%	5.86%	-10.72%
BOKF	68 Neutral	$5.78B	11.05	9.70%	2.49%	11.17%	1.47%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%
FULT	62 Neutral	$2.76B	9.63	9.69%	4.56%	21.10%	-4.20%

Commerce Bancshares Corporate Events

Commerce Bancshares Announces Executive Compensation for 2025

On January 28, 2025, Commerce Bancshares’ Board of Directors’ Compensation and Human Resources Committee approved the 2025 base salaries, effective March 29, 2025, and cash bonuses for the CEO and other executive officers. These bonuses include performance-based compensation as per the Executive Incentive Compensation Plan, along with grants of restricted stock awards under the Equity Incentive Plan, highlighting the company’s focus on incentivizing its leadership team.