Esquire Financial Holdings (ESQ) AI Stock Analysis

• Market Cap: $679.24M
• Dividend Yield: 0.78%
• Average Volume (3M): 66.76K
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.74
• Revenue Growth: 17.55%
• EPS Growth: 5.05%
• Country: US
• Employees: 138
• Sector: Financial
• Sector Strength: 77
• Industry: Banks - Regional
• EPS (TTM): 5.15
• Shares Outstanding: 8,431,454
• 10 Day Avg. Volume: 75,267
• 30 Day Avg. Volume: 66,763
• PEG Ratio: 3.10
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.07
• Price to Cash Flow (P/CF): 13.00
• P/FCF Ratio: 10.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $88.00
• Price Target Upside: 11.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Esquire Financial Holdings scores well due to its strong financial performance and attractive valuation. The company's record earnings and strategic growth initiatives are significant positive factors. However, the mixed technical indicators suggest caution in the short term. Overall, Esquire Financial Holdings is positioned favorably for long-term growth within the banking industry.

Positive Factors

Business Trends

Core deposit generation and loan growth were robust, and credit metrics remained pristine, indicating positive business trends.

Loan Growth

Annual loan growth of 15% is expected to continue, driven by litigation-related activities.

Long-term Outlook

The company’s outlook remains very attractive over the long term given the bank’s unique operating model and leading position in a niche market, which should allow continued (low-risk) growth.

Negative Factors

Earnings Outlook

A full valuation could be a headwind to ESQ’s earnings outlook if Fed futures begin pricing in additional rate cuts.

NIM Compression

Lower rates are projected to drive significant NIM compression for ESQ due to its very asset-sensitive balance sheet.

Stock Valuation

The stock is downgraded to Market Perform from Strong Buy due to valuation concerns after a sharp increase in the stock price.

Esquire Financial Holdings Business Overview & Revenue Model

Company Description

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, including short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified merchant customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. As of January 25, 2022, the company operated a full-service branch in Jericho, New York; and an administrative office in Boca Raton, Florida. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.

How the Company Makes Money

Esquire Financial Holdings generates revenue primarily through interest income derived from its loan portfolio, which includes commercial loans, consumer loans, and lines of credit. The company also earns non-interest income through fees associated with its cash management services, deposit accounts, and other financial products. Esquire's focus on the legal industry provides a niche market advantage, allowing it to offer specialized financial services and products that cater to law firms and attorneys, which contributes to its revenue streams. Additionally, Esquire may engage in strategic partnerships and collaborations within the financial sector to enhance its service offerings and expand its market reach.

Esquire Financial Holdings Financial Statement Overview

Summary

Esquire Financial Holdings demonstrates strong financial health with robust revenue growth, high profitability, and a robust balance sheet with no debt. The cash flows are efficiently managed, with room for improvement in free cash flow conversion. Overall, the company is well-positioned within the banking industry with a stable outlook and growth opportunities.

Income Statement

Esquire Financial Holdings has demonstrated robust revenue growth with a revenue increase of 23.36% from 2023 to 2024. The gross profit margin remained strong at 100%, indicating efficient cost management. The net profit margin improved to 38.50% in 2024, reflecting enhanced profitability. EBIT margin also increased significantly, showcasing operational efficiency. However, the absence of EBITDA for 2024 might suggest potential areas for further analysis.

Balance Sheet

The company's balance sheet is strong, with a debt-free status in 2024, enhancing financial stability. The equity ratio of 12.53% suggests moderate reliance on equity financing. The return on equity (ROE) improved to 18.41%, indicating effective utilization of shareholders' funds. The low debt-to-equity ratio supports lower financial risk, but the relatively low equity ratio may limit future leverage opportunities.

Cash Flow

Esquire Financial Holdings shows a stable cash flow position with consistent operating cash flow generation. Free cash flow grew by 7.13% from 2023 to 2024, indicating good cash management. The operating cash flow to net income ratio is nearly 1, demonstrating efficient cash conversion. However, the free cash flow to net income ratio suggests room for improvement in translating earnings into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
113.37M	91.89M	84.27M	64.73M	52.09M
	Gross Profit
113.37M	88.83M	81.48M	62.75M	50.23M
	EBIT
109.86M	59.73M	38.60M	22.71M	17.17M
	EBITDA
0.00	58.42M	41.35M	24.94M	18.79M
	Net Income Common Stockholders
43.66M	41.01M	28.52M	17.93M	12.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
368.07M	287.32M	351.77M	297.54M	182.84M
	Total Assets
1.89B	1.62B	1.40B	1.18B	936.71M
	Total Debt
0.00	2.18M	2.81M	2.99M	49.00K
	Net Debt
-126.33M	-165.21M	-161.31M	-146.17M	-65.14M
	Total Liabilities
1.66B	1.42B	1.24B	1.04B	49.00K
	Stockholders Equity
237.09M	198.56M	158.16M	143.74M	126.08M
Cash Flow		Free Cash Flow
42.21M	39.40M	37.56M	27.14M	12.45M
	Operating Cash Flow
42.21M	42.40M	38.80M	30.08M	15.59M
	Investing Cash Flow
-308.27M	-215.40M	-221.50M	-170.49M	-135.44M
	Financing Cash Flow
227.17M	174.09M	197.67M	224.38M	123.23M

Esquire Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 79.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESQ, the sentiment is Positive. The current price of 79.17 is above the 20-day moving average (MA) of 76.24, above the 50-day MA of 76.83, and above the 200-day MA of 70.06, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 58.17 is Neutral, neither overbought nor oversold. The STOCH value of 82.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESQ.

Esquire Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESQ	73 Outperform	$679.24M	15.66	20.04%	0.78%	17.55%	5.05%
HAFC	72 Outperform	$649.72M	10.48	8.60%	4.75%	8.33%	-21.76%
EQBK	72 Outperform	$622.26M	8.89	11.84%	1.56%	40.43%	545.45%
MBWM	71 Outperform	$660.46M	8.24	14.38%	3.54%	19.24%	-3.88%
MCBS	68 Neutral	$685.62M	10.48	16.05%	3.19%	8.80%	30.31%
BFST	67 Neutral	$672.18M	10.07	9.02%	2.46%	18.42%	-12.79%
Sector *	62 Neutral	$11.85B	9.13	8.11%	79.54%	12.80%	-5.24%

Esquire Financial Holdings Corporate Events

Esquire Financial Holdings Achieves Record Earnings in 2024

Esquire Financial Holdings reported a successful year for 2024, with significant growth in commercial loans and deposits, achieving record earnings. The company’s net income rose by 7% for the full year to $43.7 million, driven by strong core deposit growth and higher yielding commercial loans. Esquire’s strategic focus on national commercial litigation lending and efficient asset-liability management contributed to industry-leading returns on assets and equity. However, the company has tempered its real estate lending in response to market conditions, opting for investments in short-duration agency mortgage-backed securities to maintain liquidity. The company was recognized on the 2024 Fortune 100 Fastest-Growing Companies list, highlighting its robust revenue and earnings growth.