Republic First Bancorp Inc's Rocky Road Ahead: Unraveling the Factors Limiting Growth
Long-established in the Banks industry, Republic First Bancorp Inc (NASDAQ:FRBK) has enjoyed a stellar reputation. It has recently witnessed a surge of 43.85%, juxtaposed with a three-month change of -70.59%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Republic First Bancorp Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
1. Financial strength rank: 2/10
2. Profitability rank: 5/10
3. Growth rank: 5/10
4. GF Value rank: 2/10
5. Momentum rank: 1/10
Based on the above method, GuruFocus assigned Republic First Bancorp Inc the GF Score of 53 out of 100, which signals poor future outperformance potential.
Understanding Republic First Bancorp Inc Business
Republic First Bancorp Inc is an American state-chartered bank. Principally a holding company for Republic First Bank, it offers a range of credit and depository banking products and services, such as consumer and commercial deposit accounts, interest-bearing demand accounts, savings accounts, secured and unsecured commercial loans, real estate loans, automobile loans, mortgages, and other products. It operates in the reportable segment of Community banking. With a market cap of $31.2 million and sales of $108.25 million, the company's operating margin stands at 0.
Financial Strength Breakdown
Republic First Bancorp Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's low cash-to-debt ratio at 0.15 indicates a struggle in handling existing debt levels. The company's debt-to-equity ratio is 5.37, which is worse than 96.69% of 1331 companies in the Banks industry. A high debt-to-equity ratio suggests over-reliance on borrowing and vulnerability to market fluctuations. Additionally, the company's debt-to-Ebitda ratio is 9.77, which is above Joel Tillinghast's warning level of 4 and is worse than 91.85% of 1313 companies in the Banks industry. Tillinghast said in his book Big Money Think's Small: Biases, Blind Spots, and Smarter Investing that a high debt-to-Ebitda ratio can be a red flag unless tangible assets cover the debt.
Profitability Breakdown
Republic First Bancorp Inc's low Profitability rank can also raise warning signals.
Next Steps
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. It is crucial for investors to consider these factors when making investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article first appeared on GuruFocus.
