Merchants Bancorp (MBIN) AI Stock Analysis

• Market Cap: $1.68B
• Dividend Yield: 0.93%
• Average Volume (3M): 166.16K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.27
• Revenue Growth: 23.69%
• EPS Growth: 11.97%
• Country: US
• Employees: 618
• Sector: Financial
• Sector Strength: 77
• Industry: Banking
• EPS (TTM): 6.31
• Shares Outstanding: 45,850,903
• 10 Day Avg. Volume: 150,004
• 30 Day Avg. Volume: 166,156
• PEG Ratio: 0.51
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.69
• Price to Cash Flow (P/CF): -44.40
• P/FCF Ratio: 3.90
• 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: $52.17
• Price Target Upside: 43.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Merchants Bancorp's strong financial performance, with no debt and high equity, is offset by significant cash flow challenges. The stock's valuation is attractive with a low P/E ratio, but technical indicators suggest bearish conditions. The overall score reflects a solid financial base but highlights the need for improved cash flow management and cautious outlook due to current market momentum.

Positive Factors

Earnings Performance

Reported EPS of $1.85 beat MS/consensus estimates of $1.34/$1.27 on higher fees/NII and lower provision partially offset by higher expenses.

Growth Opportunities

Lower rates should drive a pickup in both of MBIN's main businesses — mortgage warehouse lending and originate-to-sell multifamily/healthcare CRE.

Negative Factors

Credit Trends

Credit trends were still negative with NPLs up for 5th straight quarter.

Merchants Bancorp Business Overview & Revenue Model

Company Description

Merchants Bancorp (MBIN) is a diversified bank holding company based in the United States. It operates primarily through its subsidiaries, Merchants Bank of Indiana and Merchants Capital, offering a range of commercial and retail banking products and services. The company focuses on mortgage banking, agricultural lending, small business loans, and deposit services. Additionally, it provides financing solutions for multifamily housing and healthcare facilities through its real estate lending and servicing segment.

How the Company Makes Money

Merchants Bancorp makes money through several key revenue streams, including interest income from loans and leasing activities, fee income from mortgage banking operations, and servicing income from its real estate lending and servicing division. The company's primary source of revenue is generated from interest earned on its loan portfolio, which includes commercial and residential real estate loans, as well as consumer and business loans. Merchants Bancorp also earns substantial fee income by originating, selling, and servicing mortgage loans, with a significant focus on multifamily and healthcare facility financing. The bank's strategic partnerships with government-sponsored enterprises and other financial institutions enhance its ability to provide competitive loan products and expand its market reach.

Merchants Bancorp Financial Statement Overview

Summary

Merchants Bancorp shows robust revenue growth and stable profitability, supported by a sound balance sheet with no debt and increased equity. However, cash flow challenges, particularly negative operating and free cash flows, pose liquidity risks.

Income Statement

Merchants Bancorp has demonstrated strong revenue growth, with a significant increase in total revenue from 2019 to 2024. The gross profit margin remains high due to the absence of cost of goods sold, typical for banks. Net profit margin has slightly improved from 46.7% in 2019 to 24.6% in 2024, indicating stable profitability. The EBIT margin is consistently high, reflecting efficient operations. However, EBITDA data is missing for 2024, limiting some analysis.

Balance Sheet

The company's balance sheet shows strong equity growth with stockholders' equity increasing from $653.7 million in 2019 to $2.24 billion in 2024. Debt-to-equity ratio has improved significantly with total debt eliminated by 2024, showcasing strong financial management. The equity ratio has increased, indicating robust capitalization. However, the return on equity has decreased from 11.8% in 2019 to 14.3% in 2024, suggesting potential efficiency issues in using equity to generate profits.

Cash Flow

Merchants Bancorp's cash flow statement reveals challenges, with negative operating cash flow in recent years. Free cash flow remains negative, indicating potential liquidity issues. The operating cash flow to net income ratio and free cash flow to net income ratio are concerning, reflecting issues in converting income into cash. Despite improvements in financing activities, the overall cash flow position suggests caution.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.30B	522.51M	427.19M	430.31M	339.78M
	Gross Profit
1.30B	522.51M	427.19M	430.31M	339.78M
	EBIT
1.29B	347.91M	294.61M	307.62M	249.16M
	EBITDA
0.00	0.00	293.63M	307.12M	245.25M
	Net Income Common Stockholders
320.39M	279.23M	219.72M	227.10M	180.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
991.04M	584.42M	345.51M	1.34B	449.53M
	Total Assets
18.81B	16.95B	12.62B	11.28B	9.65B
	Total Debt
4.34B	964.13M	960.39M	1.03B	1.35B
	Net Debt
-10.99M	379.70M	734.23M	1.34M	1.17B
	Total Liabilities
16.56B	15.25B	11.16B	10.12B	1.37B
	Stockholders Equity
2.24B	1.70B	1.46B	1.16B	810.62M
Cash Flow		Free Cash Flow
-835.28M	-363.93M	966.96M	-52.86M	-878.51M
	Operating Cash Flow
-835.28M	-356.40M	975.77M	-49.22M	-874.89M
	Investing Cash Flow
-874.27M	-3.26B	-2.86B	-474.26M	-2.53B
	Financing Cash Flow
1.60B	3.97B	1.08B	1.38B	3.08B

Merchants Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 36.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MBIN, the sentiment is Negative. The current price of 36.27 is below the 20-day moving average (MA) of 40.85, below the 50-day MA of 39.64, and below the 200-day MA of 41.39, indicating a bearish trend. The MACD of -0.85 indicates Positive momentum. The RSI at 28.02 is Positive, neither overbought nor oversold. The STOCH value of 5.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MBIN.

Merchants Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HOMB	76 Outperform	$5.50B	14.04	10.38%	2.71%	8.83%	3.77%
TBBK	74 Outperform	$2.41B	11.68	27.24%	―	11.72%	23.37%
SFBS	73 Outperform	$4.51B	20.53	14.87%	1.49%	16.28%	9.61%
FHB	71 Outperform	$3.22B	14.38	9.02%	4.03%	3.53%	-2.18%
MBIN	70 Outperform	$1.68B	6.14	16.25%	0.93%	23.69%	11.97%
Sector *	64 Neutral	$13.80B	10.64	9.23%	4.22%	17.66%	-7.66%
UBSI	61 Neutral	$4.87B	12.51	7.62%	4.30%	6.80%	1.48%