Is First Mid Bancshares, Inc. (NASDAQ:FMBH) Potentially Undervalued?
First Mid Bancshares, Inc. (NASDAQ:FMBH), operating in the financial services industry based in United States, led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on First Mid Bancshares’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for First Mid Bancshares
Is First Mid Bancshares still cheap?
Good news, investors! First Mid Bancshares is still a bargain right now. According to my valuation, the intrinsic value for the stock is $39.07, but it is currently trading at US$27.10 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, First Mid Bancshares’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from First Mid Bancshares?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of First Mid Bancshares, it is expected to deliver a negative earnings growth of -12%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although FMBH is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to FMBH, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on FMBH for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on First Mid Bancshares. You can find everything you need to know about First Mid Bancshares in the latest infographic research report. If you are no longer interested in First Mid Bancshares, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
