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How strong are Independent Bank (USA Stocks:IBTX) basic indicators given the current rise?

July 24, 2023  By Aina Ster
Macroaxis Story
Independent Bank Group (NASDAQ: IBTX), a key player in the domestic banking sector, has been demonstrating strong financial performance with a robust operating margin of 43.1%. The company's EBITDA stands at $370.5M, with an EBIT of $358M. Despite a change in working capital resulting in a loss of $53.9M, the bank has managed to generate a free cash flow of $154.3M. The bank's total assets and liabilities, along with stockholders' equity, amount to a significant $18.3B. With a forward dividend rate of 1.52 and a yield of 3.59%, the bank's commitment to shareholder returns is evident. The EPS estimate for the next year is 3.8, and the PEG ratio stands at 1.81, indicating potential for future earnings growth. The bank's valuation real value is estimated at $41.54, slightly below the analyst target price estimated value of $47.8. The bank also has a positive net debt of $33.3M, indicating a healthy financial position. The Price to Sales Ratio for Independent Bank Group is currently fairly stable, showing little variation compared to the previous year. In 2022, Independent Bank reported a Price to Sales Ratio of 4.09. The Return on Average Assets is projected to increase to 0.0121 in 2023, while the Net Income Per Employee is expected to slightly exceed $107.5K in the same year. If you have been tracking Independent Bank, you might be contemplating a purchase. The question remains whether the robust fundamental indicators will continue to drive a price increase for Independent Bank's investors. Will investors maintain their positions, or could we anticipate a sell-off?
Published over a year ago
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Reviewed by Vlad Skutelnik

Independent Bank Group (IBTX) has demonstrated strong financial health with a total stockholder equity of 2.4B and an end period cash flow of 654.3M. The company's operating income stands at 358M, reflecting its ability to generate profit from its core business operations. However, it's worth noting that the company has experienced a significant cash and cash equivalents change of a 2B loss. The company's profit margin is currently at 0.18%, which is relatively low, indicating a need for improved efficiency. Nevertheless, with a forward dividend rate of 1.52 and a Price to Earnings To Growth of 1.81X, IBTX could be a viable investment for those seeking continued profitable growth.

Continued study

Independent Bank Group is currently valued at a fair price of $41.54 per share, with modest future projections. Over a three-month investment horizon, Independent Bank has demonstrated steady performance. The Efficiency (Sharpe) Ratio of Independent Bank is 0.0834, indicating that the company has generated a return of 0.0834% per unit of risk over the past three months. When determining the volatility of a stock, it's important to use all available market data in conjunction with stock-specific technical indicators that cannot be diversified away. We have identified twenty-seven technical indicators for Independent Bank, which can be used to evaluate the company's future volatility. Please consider Independent Bank's Risk Adjusted Performance of 0.0216, downside deviation of 2.9, and Market Risk Adjusted Performance of 0.0323 to verify if our risk estimates align with your expectations.
Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Independent Bank income statement, its balance sheet, and the statement of cash flows. Potential Independent Bank investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Independent Bank investors may use each financial statement separately, they are all related. The changes in Independent Bank's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Independent Bank's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Independent Bank fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Independent Bank performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Independent Bank shares is the value that is considered the true value of the share. If the intrinsic value of Independent is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Independent Bank. Please read more on our fundamental analysis page.

How effective is Independent Bank in utilizing its assets?

Independent Bank Group reports assets on its Balance Sheet. It represents the amount of Independent resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Independent Bank aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Regional Banks space. To get a better handle on how balance sheet or income statements item affect Independent volatility, please check the breakdown of all its fundamentals.

Are Independent Bank Earnings Expected to grow?

The future earnings power of Independent Bank involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Independent Bank factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Independent Bank stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Independent expected earnings.

Independent Bank Gross Profit

Independent Bank Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Independent Bank previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Independent Bank Gross Profit growth over the last 10 years. Please check Independent Bank's gross profit and other fundamental indicators for more details.

Detailed Perspective On Independent Bank

Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Independent Bank is not uncomon. There are few distinct groups of Independent Bank stakehholders that the SEC considers insiders. Investors usually gain information through their work as corporate directors, officers, or employees. If these individuals share the information with a friend, family, or business partner and the person who receives the information exchanges stock in the company, he or shie is also an insider. Let's take a look at how the ownership of Independent is distributed among investors.

Ownership Allocation

Independent Bank secures a total of 41.28 Million outstanding shares. The majority of Independent Bank outstanding shares are owned by outside corporations. These institutional investors are usually referred to as non-private investors looking to purchase positions in Independent Bank to benefit from reduced commissions. Consequently, third-party entities are subject to a different set of regulations than regular investors in Independent Bank Group. Please pay attention to any change in the institutional holdings of Independent Bank as this could imply that something significant has changed or about to change at the company. Note that regardless of who owns the company, if the true value of the entity is less than the market is willing to pay for it, you may not be able to generate positive returns over time.
Retail Investors
9.64%		Insiders
13.42%		Institutions
76.94%
Retail Investors9.64
Insiders13.42
Institutions76.94

Asset Utilization

The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The current return on assets of Independent suggests not a very effective usage of assets in July.
Goodwill
903.4 M
Goodwill903.39 Million91.41
Tax Assets84.88 Million8.59
Independent Bank Group (IBTX) has shown promising fundamentals that suggest a potential for continued profitable growth. The company's net assets stand at a robust $18.26B, backed by a healthy end period cash flow of $654.3M. The bank's revenue is reported at $610.17M, with a profit margin of 0.18%, indicating a steady income stream. The EPS estimate for the current year is 3.66, which is expected to increase to 3.8 next year, reflecting a positive earnings outlook. The bank's financial health is further underscored by its low total debt of $621.49M against its high cash and short-term investments of $2.3B. This is complemented by a negative net debt of $-33.3M, suggesting the bank's strong liquidity position. The bank's PE ratio stands at 15.67, which is reasonable compared to the industry average. The bank's five-year return stands at 1.59%, and with 76.943% of its shares held by institutions, it demonstrates a high level of investor confidence. However, the bank's total risk alpha of -0.18 and a quarterly earnings growth of -0.22 indicate areas that need improvement. Overall, the fundamentals of Independent Bank Group point towards a potential for continued profitable growth.

Will Independent Bank current rise continue?

The semi-deviation of Independent Bank Group has recently surged past 2.85, indicating an increase in volatility and potential risk. This upward trend suggests that the stock's returns are deviating from their average value, which could be a concern for risk-averse investors. However, this could also signal the potential for higher returns for those willing to tolerate the risk. It's essential to closely monitor this trend to determine whether the current rise will persist, as it could significantly influence investment decisions regarding Independent Bank Group's stock. Currently, Independent Bank Group exhibits a below-average downside deviation. It has an Information Ratio of 0.0 and a Jensen Alpha of -0.07. However, we recommend investors to further scrutinize Independent Bank Group's expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding different market volatility trends often assists investors in timing the market. Proper use of volatility indicators allows traders to measure Independent Bank's stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly impact Independent Bank's stock price while adding stress to investors as they watch their shares' value decline. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Independent Bank Group (IBTX) presents a compelling investment opportunity. The analyst overall consensus is a 'Buy' with a target price estimated value of $47.8. This is further supported by the valuation real value of $41.54, which indicates a potential upside. The possible upside price is $49.15, providing a good margin for profit. However, it's worth noting that there are 3 analyst holds and a possible downside price of $42.1, suggesting some level of risk. Despite this, with the fiscal year end in December and the naive expected forecast value at $45.63, the stock could potentially continue to generate returns for investors. .

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Editorial Staff

Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Independent Bank Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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