Franklin Financial Services (FRAF) AI Stock Analysis

• Market Cap: $228.48M
• Dividend Yield: 2.51%
• Average Volume (3M): 51.03K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.14
• Revenue Growth: 12.06%
• EPS Growth: 10.38%
• Country: US
• Employees: 306
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.35
• Shares Outstanding: 4,479,037
• 10 Day Avg. Volume: 79,380
• 30 Day Avg. Volume: 51,030
• PEG Ratio: -0.62
• Price to Book (P/B): 0.91
• Price to Sales (P/S): 1.16
• P/FCF Ratio: 6.89
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 3.33
• Enterprise Value/Ebitda: 11.84
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $55.00 ▲(3.17% Upside)

The score is driven primarily by stable financial fundamentals (low leverage, reasonable ROE, and healthy net margins) tempered by declining recent revenue growth and weaker gross margin trends. Technicals add caution due to short-term price softness and slightly negative MACD, while valuation and the dividend-related corporate event provide moderate support.

Positive Factors

Strong Profitability Margins

Strong profitability margins indicate effective cost management and pricing power, supporting sustainable earnings and competitive positioning.

Low Leverage

Low leverage enhances financial stability and flexibility, reducing risk and enabling investment in growth opportunities.

Consistent Dividend Policy

A consistent dividend policy reflects financial health and management's commitment to returning value to shareholders, enhancing investor confidence.

Negative Factors

Revenue Declines

Declining revenue growth may signal challenges in market demand or competitive pressures, potentially impacting future profitability.

Fluctuating Cash Flow

Volatile cash flow can hinder strategic planning and investment, affecting long-term growth and financial resilience.

Leadership Change

Leadership changes can disrupt strategic continuity and operational efficiency, affecting the company's ability to execute its business model effectively.

Franklin Financial Services Business Overview & Revenue Model

Company Description

Franklin Financial Services Corporation operates as the bank holding company for Farmers and Merchants Trust Company of Chambersburg that provides commercial, retail banking, and trust services to small and medium-sized businesses, individuals, governmental entities, and non-profit organizations in Pennsylvania. It offers various deposit products, including checking, savings, money management, and time deposit accounts, as well as demand deposits. The company also provides commercial real estate, construction and land development, agricultural, commercial and industrial, and residential mortgage loans, as well as installment and revolving loans to consumers; and secured and unsecured commercial and industrial loans, including accounts receivable and inventory financing, and commercial equipment financing. In addition, it offers various investment and trust services comprising estate planning and administration, corporate and personal trust fund management, pension, and profit sharing and other employee benefit funds management services, as well as custodial services; sells mutual funds, annuities, and insurance products; and offers safe deposit facilities and fiduciary services. Further, the company, through its subsidiary, Franklin Future Fund Inc., operates as a non-bank investment company that makes venture capital investments. It operates twenty-two community banking offices in Franklin, Cumberland, Fulton, and Huntingdon counties, Pennsylvania. Franklin Financial Services Corporation was founded in 1906 and is headquartered in Chambersburg, Pennsylvania.

How the Company Makes Money

Franklin Financial Services generates revenue through multiple key streams. The company earns management fees from its investment management services, which are based on the assets under management (AUM). Additionally, FRAF generates revenue from advisory fees charged for wealth management and financial planning services. Insurance products, such as life and health insurance, contribute to the revenue through premiums collected from policyholders. Significant partnerships with financial institutions and brokerages allow FRAF to expand its reach and client base, further enhancing its revenue potential. Furthermore, the firm may earn commissions from the sale of financial products and maintain a portion of the investment returns generated for clients, aligning its incentives with customer success.

Franklin Financial Services Financial Statement Overview

Summary

Financials are solid but not without near-term pressure: low leverage (debt-to-equity 0.024) and reasonable ROE (10.1%) support stability, while profitability remains healthy (TTM net margin 12.9%). Offsetting this, TTM revenue growth has declined and gross margin deterioration suggests cost/efficiency headwinds, with cash flow showing volatility and incomplete net-income-to-FCF conversion.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a decline in revenue growth, but the company maintains a healthy net profit margin of 12.9%. Historical data shows fluctuating revenue growth rates, with strong margins in previous years. The gross profit margin has decreased significantly in the TTM period, indicating potential cost management issues.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.024 in the TTM period, indicating low leverage. Return on equity is reasonable at 10.1%, showing efficient use of equity. The equity ratio is stable, suggesting a solid financial foundation.

Cash Flow

Cash flow analysis reveals a positive free cash flow growth in the TTM period, but historical data shows volatility. The operating cash flow to net income ratio is strong at 6.67, indicating good cash generation relative to net income. However, the free cash flow to net income ratio suggests that not all net income is translating into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	125.59M	113.83M	90.38M	70.27M	63.98M	59.94M
Gross Profit	76.42M	67.91M	64.53M	64.76M	63.18M	51.33M
EBITDA	21.47M	15.40M	17.77M	18.93M	24.22M	14.39M
Net Income	15.67M	11.10M	13.60M	14.94M	19.62M	12.80M
Balance Sheet
Total Assets	2.30B	2.20B	1.84B	1.70B	1.77B	1.54B
Cash, Cash Equivalents and Short-Term Investments	271.53M	524.10M	501.87M	565.71M	715.45M	466.83M
Total Debt	214.81M	223.96M	154.48M	25.77M	24.45M	24.89M
Total Liabilities	2.13B	2.05B	1.70B	1.59B	1.62B	1.39B
Stockholders Equity	166.34M	144.72M	132.14M	114.20M	157.06M	145.18M
Cash Flow
Free Cash Flow	25.21M	19.19M	26.07M	13.03M	17.54M	5.95M
Operating Cash Flow	26.48M	21.75M	26.57M	25.24M	26.35M	6.43M
Investing Cash Flow	-199.92M	-184.37M	-178.27M	-95.06M	-133.94M	-277.31M
Financing Cash Flow	125.27M	343.08M	109.94M	-40.44M	225.59M	244.20M

Franklin Financial Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 53.31
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRAF, the sentiment is Positive. The current price of 53.31 is above the 20-day moving average (MA) of 50.72, above the 50-day MA of 51.99, and above the 200-day MA of 44.00, indicating a neutral trend. The MACD of -0.49 indicates Positive momentum. The RSI at 50.23 is Neutral, neither overbought nor oversold. The STOCH value of 57.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRAF.

Franklin Financial Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPBK	70 Outperform	$208.10M	8.13	10.99%	3.32%	9.10%	12.36%
HWBK	69 Neutral	$244.25M	10.32	14.27%	2.39%	0.16%	258.06%
VABK	69 Neutral	$220.69M	11.53	10.41%	3.41%	1.11%	14.44%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
EFSI	67 Neutral	$205.97M	24.09	6.63%	3.11%	-1.45%	-31.32%
FRAF	67 Neutral	$228.48M	10.76	9.91%	2.51%	12.06%	10.38%
FXNC	66 Neutral	$237.44M	13.42	7.36%	2.49%	48.94%	11.61%

Franklin Financial Services Corporate Events

Franklin Financial Services Announces First-Quarter 2026 Dividend

On January 15, 2026, Franklin Financial Services Corporation’s board declared a regular cash dividend of $0.33 per share for the first quarter of 2026, matching the fourth quarter 2025 payout and marking a 3.1% increase over the first quarter of 2025, with payment scheduled for February 25, 2026 to shareholders of record on February 6, 2026. The announcement came alongside a shareholder presentation highlighting steady dividend growth to $1.31 per share annually in 2025, robust operating metrics at F&M Trust, strong performance at its Linglestown office and wealth management unit, significant community giving, and an 80% share price gain in 2025 that sharply outpaced small-cap and community bank benchmarks, underscoring stronger market positioning and enhanced returns for investors.

The most recent analyst rating on (FRAF) stock is a Buy with a $61.00 price target. To see the full list of analyst forecasts on Franklin Financial Services stock, see the FRAF Stock Forecast page.

Franklin Financial Approves Stock Repurchase Program

On December 11, 2025, Franklin Financial Services‘ Board of Directors approved a stock repurchase program, allowing the buyback of up to 150,000 shares of the company’s common stock. This initiative, set to occur between January 1, 2026, and December 31, 2026, is expected to impact the company’s market operations and shareholder value.

The most recent analyst rating on (FRAF) stock is a Buy with a $59.00 price target. To see the full list of analyst forecasts on Franklin Financial Services stock, see the FRAF Stock Forecast page.