HBT Financial overview and recent performance snapshot
HBT Financial (HBT) has drawn fresh attention as investors review its recent share performance and fundamentals, with the stock closing at $27.44 and showing positive total returns over the past 3 months and year.
The Illinois based bank holding company reports revenue of $233.924 million and net income of $77.008 million, with annual revenue and net income growth rates of 17.38% and 18.78% respectively, and a reported market value of about $1.004 billion.
See our latest analysis for HBT Financial.
The recent 1-day share price return of 0.96% and 7-day return of 2.66% build on a 90-day share price return of 6.73%, while the 1-year total shareholder return of 34.29% points to sustained momentum.
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With a reported intrinsic discount near 59% and a market value of about US$1.0b, the key question now is simple: are you looking at an undervalued regional bank or a stock where the market is already pricing in future growth?
Price to earnings of 13.2x: Is it justified?
HBT Financial trades on a P/E of 13.2x, which sits slightly above both its estimated fair P/E of 13.1x and the US banks industry average of 11.4x.
The P/E ratio compares the current share price to earnings per share, so it effectively tells you how many dollars investors are paying today for each dollar of HBT's earnings. For a regional bank with a long operating history, this is a common way for the market to weigh earnings power against perceived risks and growth potential.
Here, the market is assigning HBT a premium to the broader US banks peer group and pricing it just above the level our SWS fair ratio model suggests could be more in line with fundamentals. That sits alongside an SWS DCF model output that places fair value at $66.75, which is well above the current $27.44 share price and implies the market could be pricing in more modest cash flow expectations than that model. Together, these signals indicate that investors are paying a higher multiple of earnings compared to peers, while the fair ratio highlights a level the valuation could move toward if sentiment or earnings expectations shift.
Compared with the US banks industry P/E of 11.4x and a peer average of 12.7x, HBT's 13.2x multiple stands out as meaningfully higher. That premium suggests the market is currently valuing HBT's earnings above the sector norm, despite the fair P/E estimate of 13.1x sitting slightly lower than where the shares trade today.
Explore the SWS fair ratio for HBT Financial
Result: Price-to-earnings of 13.2x (OVERVALUED)
However, you also need to weigh risks such as potential pressure on regional banks' earnings and any shift in sentiment toward HBT's higher-than-peer P/E multiple.
Find out about the key risks to this HBT Financial narrative.
Another view on value
While the P/E of 13.2x looks slightly rich versus peers and the fair ratio, the SWS DCF model points the other way. With an estimated fair value of $66.75 versus a $27.44 share price, this approach frames HBT as materially undervalued. Which signal do you weigh more?
For a closer look at how this cash flow based view is built and what might need to change for the market to close that gap, Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out HBT Financial for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 62 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Seeing mixed signals on value and growth potential in this review, use the data to form your own view quickly and weigh up the 3 key rewards and 2 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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