• Wondering if SouthState Bank at around US$97.67 is offering good value or asking too much from here? This article walks through what the current price might really imply about the stock.
• The share price has been relatively steady over the last week with a 0.4% decline, while the 30 day return of 5.6% and 1 year return of 14.3% sit alongside a 3 year return of 67.5% and 5 year return of 24.5%.
• Recent coverage has focused on SouthState Bank as part of broader discussions around regional banks, capital strength, and investor appetite for interest sensitive financials. This context helps explain why shorter term moves look different to the longer term record, and why some investors are revisiting the name now.
• On Simply Wall St's valuation checks, SouthState Bank currently scores 5 out of 6. The rest of this article will walk through what different valuation methods say about that score, before finishing with a way to think about value that goes beyond any single metric.

Find out why SouthState Bank's 14.3% return over the last year is lagging behind its peers.

Approach 1: SouthState Bank Excess Returns Analysis

The Excess Returns model looks at how much profit a bank can earn above the return that equity investors require, then capitalizes those surplus profits into an intrinsic value per share.

For SouthState Bank, the starting point is a Book Value of $92.21 per share and a Stable Book Value estimate of $101.91 per share, based on weighted future book value estimates from 10 analysts. The model uses a Stable EPS of $10.40 per share, sourced from weighted future return on equity estimates from 9 analysts, alongside an Average Return on Equity of 10.21%.

The required return, or Cost of Equity, is $7.11 per share. The difference between this and the Stable EPS is the Excess Return of $3.29 per share, which is treated as the value created above investors’ required return.

By projecting and discounting these excess returns, Simply Wall St’s model arrives at an intrinsic value of US$194.09 per share. Compared with the current share price of about US$97.67, this implies the shares trade at a 49.7% discount on this measure.

Result: UNDERVALUED

Our Excess Returns analysis suggests SouthState Bank is undervalued by 49.7%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SouthState Bank.

Approach 2: SouthState Bank Price vs Earnings

The P/E ratio is a common way to value profitable banks because it ties the share price directly to the earnings that equity holders are paying for each year. For you as a shareholder, it is a quick sense check of how much the market is willing to pay for every US$1 of current earnings.

What counts as a “normal” or “fair” P/E will usually reflect what investors expect for future earnings growth and how much risk they see in the business. Higher expected growth and lower perceived risk can support a higher multiple, while slower growth or higher risk will usually mean a lower P/E looks more reasonable.

SouthState Bank currently trades on a P/E of 10.23x. This sits below the Banks industry average of 11.40x and below the peer average of 12.31x that Simply Wall St uses for comparison. Simply Wall St also calculates a proprietary “Fair Ratio” for SouthState Bank of 12.78x. This Fair Ratio is designed to be more tailored than a simple peer or industry comparison because it factors in the company’s earnings growth profile, profit margins, risk indicators, industry and market cap together.

Since the Fair Ratio of 12.78x is meaningfully above the current P/E of 10.23x, the shares screen as undervalued on this multiple approach.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your SouthState Bank Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives let you turn your view of SouthState Bank into a simple story that links its business drivers, expected revenue, earnings and margins to a forecast and a fair value on Simply Wall St’s Community page. It then compares that fair value to the current price and keeps it updated when new news or earnings arrive. One investor might focus on expansion into high growth markets, efficiency gains and the US$118.85 fair value implied by analyst assumptions. Another might build a more cautious Narrative around geographic concentration, commercial real estate exposure and funding costs. This gives you two different but clearly quantified reference points for your own investment decisions.

Do you think there's more to the story for SouthState Bank? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.