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Essa Bancorp (ESSA)
NASDAQ:ESSA
US Market

Essa Bancorp (ESSA) AI Stock Analysis

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Essa Bancorp

(NASDAQ:ESSA)

74Outperform
Essa Bancorp's strong financial performance, highlighted by profitability and a stable balance sheet, is complemented by positive technical indicators suggesting upward momentum. The strategic merger with CNB Financial is a key driver for future growth, while the valuation remains reasonable. However, cash flow stability and potential overbought technical signals warrant cautious optimism.

Essa Bancorp (ESSA) vs. S&P 500 (SPY)

Essa Bancorp Business Overview & Revenue Model

Company DescriptionESSA Bancorp (ESSA) operates as a bank holding company that provides a range of banking services to individual and corporate customers. It is primarily engaged in offering traditional banking products and services such as savings accounts, checking accounts, certificates of deposit, and loans, including commercial real estate, residential real estate, and consumer loans. ESSA Bancorp primarily operates through its subsidiary, ESSA Bank & Trust, which is headquartered in Stroudsburg, Pennsylvania.
How the Company Makes MoneyESSA Bancorp makes money by collecting interest income from its lending activities, which include commercial real estate loans, residential mortgage loans, and consumer loans. The company earns interest on the loans it provides to customers, which is a major source of revenue. Additionally, ESSA generates non-interest income from service charges on deposit accounts, fees for various banking services, and gains from the sale of loans and securities. The bank also benefits from partnerships with financial service providers for wealth management and insurance products, which contribute to its earnings through fee-based income.

Essa Bancorp Financial Statement Overview

Summary
Essa Bancorp presents a robust financial profile with strong profitability and a stable balance sheet. However, challenges remain in accelerating growth and enhancing cash flow stability. The company's strategic focus should be on optimizing cash flow management and pursuing growth opportunities to improve its financial standing.
Income Statement
75
Positive
Essa Bancorp exhibits solid profitability with a consistent gross profit margin and a net profit margin reflecting efficient revenue conversion. Revenue growth is modest year-over-year, indicating steady but not aggressive expansion. EBIT and EBITDA margins are healthy, supporting strong operational performance. However, the growth rate of revenue has slowed compared to previous years.
Balance Sheet
70
Positive
The company's balance sheet is stable with a manageable debt-to-equity ratio, indicating prudent leverage. The return on equity is satisfactory, showing effective use of equity capital. The equity ratio suggests a sound capital base, but there is room for improvement in reducing liabilities to enhance financial resilience.
Cash Flow
68
Positive
Operating cash flow coverage of net income is adequate, demonstrating operational efficiency. The free cash flow growth rate has been inconsistent, with fluctuations in capital expenditures and financing activities. The free cash flow to net income ratio is slightly below optimal, suggesting potential volatility in cash generation.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
98.67M67.84M69.30M68.22M64.39M61.46M
Gross Profit
98.67M67.84M69.30M68.22M64.39M61.46M
EBIT
41.88M20.96M23.07M28.05M19.90M17.60M
EBITDA
15.55M0.0025.18M27.18M22.08M19.81M
Net Income Common Stockholders
16.61M16.99M18.58M20.07M16.42M14.42M
Balance SheetCash, Cash Equivalents and Short-Term Investments
254.59M254.55M419.46M236.58M399.53M368.40M
Total Assets
2.20B2.19B2.29B1.86B1.86B1.89B
Total Debt
215.00M290.00M374.65M230.81M6.37M125.88M
Net Debt
172.17M241.42M289.25M202.87M-152.58M-30.04M
Total Liabilities
1.96B1.96B374.65M1.65B1.66B1.70B
Stockholders Equity
234.18M230.42M219.71M212.34M201.82M191.40M
Cash FlowFree Cash Flow
9.67M13.21M19.91M22.14M18.97M18.69M
Operating Cash Flow
9.82M13.43M20.86M22.71M19.38M19.75M
Investing Cash Flow
38.33M77.02M-377.12M-128.13M31.79M15.43M
Financing Cash Flow
-42.40M-127.27M413.73M-25.59M-48.14M68.49M

Essa Bancorp Technical Analysis

Technical Analysis Sentiment
Negative
Last Price19.04
Price Trends
50DMA
20.49
Negative
100DMA
20.11
Negative
200DMA
18.92
Positive
Market Momentum
MACD
-0.38
Positive
RSI
25.46
Positive
STOCH
7.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESSA, the sentiment is Negative. The current price of 19.04 is below the 20-day moving average (MA) of 20.91, below the 50-day MA of 20.49, and above the 200-day MA of 18.92, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 25.46 is Positive, neither overbought nor oversold. The STOCH value of 7.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESSA.

Essa Bancorp Risk Analysis

Essa Bancorp disclosed 14 risk factors in its most recent earnings report. Essa Bancorp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Essa Bancorp Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$193.34M10.927.30%3.15%11.38%-6.14%
67
Neutral
$959.66M14.005.68%5.01%7.79%-8.83%
64
Neutral
$1.68B14.5216.49%2.63%11.10%3.74%
64
Neutral
$13.79B10.529.20%4.24%17.25%-7.60%
62
Neutral
$510.22M18.306.72%1.08%14.02%5.59%
54
Neutral
$179.89M168.020.66%2.67%2.28%-83.16%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ESSA
Essa Bancorp
19.18
1.91
11.06%
BRKL
Brookline Bancorp
10.85
1.77
19.49%
CHCO
City Holding Company
114.48
15.63
15.81%
FFNW
First Financial Northwest
19.55
-0.76
-3.74%
HIFS
Hingham Institution For Savings
238.16
75.22
46.16%

Essa Bancorp Corporate Events

M&A TransactionsBusiness Operations and Strategy
Essa Bancorp Announces Strategic Merger with CNB Financial
Positive
Jan 10, 2025

ESSA Bancorp, Inc. has entered into a merger agreement with CNB Financial Corporation, where ESSA will merge into CNB and ESSA Bank & Trust will merge into CNB Bank. This strategic merger, valued at approximately $214 million, will result in the combined company having $8 billion in assets and expanding CNB’s presence in eastern Pennsylvania. The merger is expected to be financially beneficial with CNB projecting significant accretion to earnings per share by 2026 and a strong pro forma balance sheet, enhancing its market position in Pennsylvania.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.