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Meta Financial (CASH) Surges 76.2% YTD: What's Driving It?

Zacks Equity Research

Shares of Meta Financial Group, Inc. CASH have surged nearly 76.2%, year to date, compared with the industry’s growth of approximately 18.4%. Solid fundamentals, driven by steady loan and deposit growth, as well as inorganic expansion strategy, along with steady capital deployment, seem to be the primary reasons for this impressive performance.

Further, this Zacks Rank #2 (Buy) stock has been witnessing solid estimate revisions. Over the last 60 days, the Zacks Consensus Estimate jumped 12.6% to $2.76 for fiscal 2019 (ended Sep 30) and 1.5% to $3.43 for fiscal 2020.

Also, the stock currently has a VGM Score of B. 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.

Moreover, Meta Financial has an impressive earnings surprise history. The company has surpassed estimates in three of the trailing four quarters, the average beat being15.78%.

While past performance does not guarantee a similar trend in the future, we believe the following factors are adequate to support a steady price appreciation for Meta Financial:

Revenue Growth: Top-line growth is a key strength for 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 $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 54.17% for fiscal 2019 compared with stable revenues for the industry.

Strong Leverage: Meta Financial’s debt/equity ratio stands at 0.25, compared with the industry average of 0.64, indicating a relatively lower debt burden. It also suggests the financial stability of the company even in adverse economic conditions.

Superior Return on Equity (ROE): Meta Financial’s ROE of 11.64%, compared with the industry average of 8.77%, highlights the company’s commendable position over its peers.

Other Stocks to Consider

Banner Corporation BANR has been witnessing upward estimate revisions for the last 60 days. Year to date, the company’s share price has been up more than 5%. Currently, it also holds a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United Community Financial Corp. UCFC has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock has jumped more than 23%, year to date. It currently carries a Zacks Rank of 2.

Northfield Bancorp, Inc. NFBK has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 17.5%, year to date. It also holds a Zacks Rank of 2, at present.

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Northfield Bancorp, Inc. (NFBK) : Free Stock Analysis Report
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