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Meta Financial (CASH) Rallies 46.6% YTD: Is More Upside Left?

Zacks Equity Research

Shares of Meta Financial Group, Inc. CASH surged nearly 46.6% year to date as compared with the industry’s growth of approximately 12.6%. Strong fundamentals driven by steady loan and deposit growth as well as inorganic expansion strategy seem to be the primary reasons for this impressive stock performance.

Further, this Zacks Rank #2 (Buy) stock has been witnessing solid estimate revisions. Over the last 60 days, the Zacks Consensus Estimate for fiscal 2019 (ended Sep 30) jumped 6.8% to $2.50.

Moreover, the stock has an impressive earnings surprise history. Meta Financial has surpassed the estimates for three of the four trailing quarters, with an average beat of 8.58%.

While past performance doesn’t guarantee similar trend in the future, we believe the following factors are enough to support a steady price rise for Meta Financial:

Revenue Growth: Top-line growth remains a key strength at Meta Financial, given the robust growth in loans and deposits. Furthermore, the company’s acquisition of Crestmark Bancorp, Inc. and its bank subsidiary, Crestmark Bank in 2018 for a purchase price of $295.8 million included acquired loans and leases worth around $1.06 billion.

Notably, the company’s revenues are estimated at a growth rate of 55.4% for fiscal 2019 compared with stable revenues for the industry.

Strong Leverage: Meta Financial’s debt/equity ratio stands at 0.12, compared with the industry average of 0.65, indicating a relatively lower debt burden. It also indicates the financial stability of the company even in adverse economic conditions.

Superior Return on Equity (ROE): Meta Financial’s ROE of 10.46%, compared with the industry average of 8.77%, highlights the company’s commendable position over its peers.

Stock Looks Undervalued: The stock currently has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks to Consider

Brookline Bancorp, Inc. BRKL has been witnessing upward estimate revisions for the last 60 days. Year to date, the company’s share price has been up more than 7%. Currently, it also sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dime Community Bancshares, Inc. DCOM has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 8% year to date. It currently carries a Zacks Rank of 2.

First Defiance Financial Corp. FDEF has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 12.7% year to date. It also holds a Zacks Rank of 2, at present.

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Meta Financial Group, Inc. (CASH) : Free Stock Analysis Report
Dime Community Bancshares, Inc. (DCOM) : Free Stock Analysis Report
First Defiance Financial Corp. (FDEF) : Free Stock Analysis Report
Brookline Bancorp, Inc. (BRKL) : Free Stock Analysis Report
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