First Republic Bank (NYSE:FRC) is a $15 billion company today. Investors that bought shares one year ago are sitting on a -0.58% total return. That's below the S&P 500's return of 13.99%.
First Republic Bank stock is underperforming the market. It's beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we've turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: First Republic Bank reported a recent EPS growth rate of 5.66%. That's below the banking industry average of 67.55%. That's not a good sign. We like to see companies that have higher earnings growth.
✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the banking industry is 16.21. And First Republic Bank's ratio comes in at 20.35. Its valuation looks expensive compared to many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for First Republic Bank stock is 128.82%. That's below the banking industry average of 212.80%. That's a good sign. First Republic Bank's debt levels are not out of control.
✓ Free Cash Flow per Share Growth : First Republic Bank has increased its FCF per share over the last year relative to its competitors. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.
✗ Profit Margins : The profit margin of First Republic Bank comes in at 27.79% today. And generally, the higher, the better. We also like to see this ratio above competitors. First Republic Bank's profit margin is below the banking average of 27.87%. So that's a negative indicator for investors.
✗ Return on Equity : Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for First Republic Bank is 11.11% and that's below its industry average ROE of 12.68%.
First Republic Bank stock passes two of our six key metrics today. That's why our Investment U Stock Grader gives it a Hold with Caution.