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Home Bancshares (HOMB)
:HOMB
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Home Bancshares
(NYSE:HOMB)
Rating:74Outperform
Price Target:―
Home Bancshares (HOMB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.54B
Dividend Yield2.71%
Average Volume (3M)825.76K
Price to Earnings (P/E)13.4
Beta (1Y)0.87
Revenue Growth6.67%
EPS Growth8.50%
CountryUS
Employees2,552
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.56
Shares Outstanding197,463,930
10 Day Avg. Volume668,435
30 Day Avg. Volume825,757
Financial Highlights & Ratios
PEG Ratio3.38
Price to Book (P/B)1.39
Price to Sales (P/S)0.00
P/FCF Ratio14.51
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.33Price Target Upside11.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Home Bancshares Business Overview & Revenue Model
Company DescriptionHome Bancshares (HOMB) is a bank holding company headquartered in Conway, Arkansas, primarily operating through its wholly owned subsidiary, Centennial Bank. The company provides a wide range of commercial and retail banking services to businesses, real estate developers, investors, individuals, and municipalities. It operates in several states across the Southern and Southeastern United States, focusing on delivering a variety of financial products including loans, deposit accounts, and treasury management services.
How the Company Makes MoneyHome Bancshares generates revenue primarily through the interest income earned on loans and investment securities. The company's loan portfolio includes a variety of financial products such as commercial real estate loans, residential real estate loans, construction loans, and consumer loans. Additionally, HOMB earns non-interest income from service charges, fees for various banking services, and mortgage banking activities. Significant partnerships with businesses and municipalities help in expanding its loan and deposit base, contributing to overall earnings. The company's strategic acquisitions also play a vital role in expanding its market presence and customer base, further driving revenue growth.
Home Bancshares Financial Statement Overview
Summary
Home Bancshares exhibits a robust financial position with strong revenue growth and a solid balance sheet marked by a substantial increase in cash holdings and reduced leverage. Profitability remains high with consistent net income growth, but attention should be paid to declining operating cash flow. Overall, the financial health of the bank is commendable, reflecting a well-managed growth strategy and prudent financial practices.Income Statement
Home Bancshares has demonstrated strong revenue growth, with an impressive increase from $978.3 million in 2023 to $1.3 billion in 2024. The gross profit margin remains robust as gross profit equals total revenue, indicating efficient cost management. While EBIT and EBITDA margins are unavailable for 2024, the net profit margin improved slightly from 40.2% in 2023 to 30.9% in 2024, showcasing solid profitability. The overall growth trajectory is positive, indicating a healthy expansion.78
Positive
Balance Sheet
The bank maintains a strong balance sheet, with a significant increase in cash holdings from $1 billion in 2023 to $3.4 billion in 2024, enhancing liquidity. The debt-to-equity ratio has improved due to the absence of total debt in 2024, compared to $1.7 billion in 2023, reducing leverage risk. With equity increasing to $3.96 billion, the equity ratio remains stable, indicating a solid capital structure. Return on equity remains strong, reflecting efficient use of equity capital.85
Very Positive
Cash Flow
Operating cash flow decreased from $379.7 million in 2023 to $297.1 million in 2024, reflecting changes in working capital management. However, free cash flow remained stable at $297.1 million, supported by no significant capital expenditures. The operating cash flow to net income ratio suggests effective cash generation relative to net income, though the decline in operating cash flow warrants close monitoring for future liquidity management.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.22B | 969.02M | 978.26M | 918.88M | 699.78M | 684.56M | Gross Profit |
| 819.58M | 969.02M | 1.06B | 918.88M | 634.82M | 601.58M | EBIT |
| 564.73M | 626.38M | 619.18M | 536.67M | 416.77M | 277.70M | EBITDA |
| 424.46M | 0.00 | 542.81M | 426.43M | 436.26M | 297.79M | Net Income Common Stockholders |
| 417.34M | 402.24M | 392.93M | 305.26M | 319.02M | 214.45M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 3.98B | 1.01B | 4.77B | 6.77B | 3.74B | Total Assets |
| 22.99B | 22.49B | 22.66B | 22.88B | 18.05B | 16.40B | Total Debt |
| 1.20B | 1.04B | 1.74B | 1.09B | 771.09M | 770.33M | Net Debt |
| 1.20B | 129.65M | 740.92M | 365.63M | -2.88B | -493.46M | Total Liabilities |
| 18.95B | 18.53B | 18.87B | 19.36B | 15.29B | 13.79B | Stockholders Equity |
| 4.04B | 3.96B | 3.79B | 3.53B | 2.77B | 2.61B |
| Cash Flow | Free Cash Flow | ||||
| 386.15M | 422.12M | 371.12M | 404.16M | 379.10M | 280.18M | Operating Cash Flow |
| 424.22M | 460.65M | 379.67M | 413.17M | 389.38M | 291.73M | Investing Cash Flow |
| -33.56M | 5.67M | 578.46M | -1.02B | 624.66M | -651.94M | Financing Cash Flow |
| -282.71M | -556.18M | -682.71M | -2.31B | 1.37B | 1.13B |
Home Bancshares Technical Analysis
Neutral
28.08
Price Trends
27.62
Positive
28.36
Negative
28.01
Positive
Market Momentum
0.32
Positive
48.02
Neutral
12.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOMB, the sentiment is Neutral. The current price of 28.08 is below the 20-day moving average (MA) of 28.49, above the 50-day MA of 27.62, and above the 200-day MA of 28.01, indicating a neutral trend. The MACD of 0.32 indicates Positive momentum. The RSI at 48.02 is Neutral, neither overbought nor oversold. The STOCH value of 12.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HOMB.
Home Bancshares Risk Analysis
Home Bancshares disclosed 29 risk factors in its most recent earnings report. Home Bancshares reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Home Bancshares Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.54B | 13.42 | 10.63% | 2.71% | 6.67% | 8.50% | |
74 Outperform | $5.52B | 10.58 | 9.90% | 3.34% | 19.04% | ― | |
73 Outperform | $4.62B | 21.76 | 6.63% | 3.25% | 8.10% | 6.95% | |
69 Neutral | $4.87B | 12.67 | 5.48% | 5.06% | 1.60% | -18.84% | |
68 Neutral | $5.12B | 13.35 | 7.30% | 4.11% | 6.39% | 2.93% | |
67 Neutral | $4.89B | 21.17 | 14.60% | 2.09% | 16.01% | 15.70% | |
64 Neutral | $12.64B | 9.78 | 7.67% | 17015.08% | 12.23% | -6.02% |
* Financial Sector Average
Performance Comparison
HOMB
Home Bancshares
28.08
5.14
22.41%
CADE
Cadence Bancorporation
30.20
2.98
10.95%
FFIN
First Financial Bankshares
34.21
4.69
15.89%
GBCI
Glacier Bancorp
40.67
4.22
11.58%
UBSI
United Bankshares
36.01
5.20
16.88%
VLY
Valley National Bancorp
8.70
1.87
27.38%
Home Bancshares Earnings Call Summary
Earnings Call Date:Apr 16, 2025
(Q1-2025)
| % Change Since: 8.84%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including record earnings, strong loan and deposit growth, and improved asset quality. However, these were tempered by challenges such as the expenses related to the Texas lawsuit and the uncertain economic environment. Despite some declines in specific loan portfolios, the overall performance was very strong.Q1-2025 Updates
Positive Updates
Record Quarterly Earnings
Home BancShares reported a record $115.2 million in earnings, translating to $0.58 per share, marking a significant breakout from previous quarters.
Strong Loan and Deposit Growth
The company achieved net loan growth of $187.6 million and increased deposits by over $395 million, bringing total deposits to $17.5 billion.
Improved Asset Quality
Nonperforming loans improved to 0.60% from 0.67%, while nonperforming assets improved to 0.56% from 0.63%. Reserve coverage increased to 312%.
High Capital Ratios
The company reported strong capital ratios with CET1 at 15.4%, leverage at 13.3%, and total risk-based capital at 19.1%.
Expansion in Net Interest Margin
The net interest margin improved to 4.44%, up from 4.39% in the previous quarter and 4.13% in the same quarter last year.
Negative Updates
Impact of Texas Lawsuit
There was a $2 million after-tax expense related to the Texas lawsuit, impacting core earnings for the quarter.
Uncertain Economic Environment
Despite recording strong performance metrics, the company acknowledged that these results were achieved during uncertain economic times.
Challenges in C&I Loan Portfolio
The C&I loan portfolio saw a decline of approximately $100 million, mainly due to exiting single credit broadly syndicated and middle market loans.
Company Guidance
In the Home BancShares, Inc. First Quarter 2025 Earnings Call, the company reported strong financial performance, achieving several record metrics despite economic uncertainties. The bank's earnings were a significant highlight, with a record $115.2 million, translating to $0.58 per share. Core earnings stood at $111.9 million or $0.56 per share. Revenue reached $260.1 million, surpassing the previous quarter by $700,000 and the same quarter last year by $13.1 million. The net interest margin improved to 4.44% from 4.39% in the previous quarter. Net loan growth was robust at $187.6 million, with total loans reaching a record $14.950 billion. Deposits increased by over $395 million, totaling $17.5 billion, resulting in a loan-to-deposit ratio of 85.24%. Asset quality metrics also improved, with nonperforming loans decreasing to 0.60% and reserves covering 312% of nonperforming loans. Capital ratios were strong, with CET1 at 15.4%, leverage at 13.3%, and total risk-based capital at 19.1%. The tangible book value increased to $13.15, and the return on tangible common equity was 18.39%. The company also repurchased around 1 million shares during the quarter and hinted at potential further buybacks and M&A activities, contingent on finding suitable opportunities.Home Bancshares Corporate Events
Business Operations and StrategyFinancial Disclosures
Home BancShares Reports Record Q1 2025 Net Income
Positive
Apr 16, 2025
Home BancShares reported a record net income of $115.2 million for the first quarter of 2025, with diluted earnings per share reaching $0.58, marking a new high for the company. The results reflect a strategic focus on revenue and expense management, with notable improvements in net interest margin and a decrease in interest expense due to a declining interest rate environment, despite a decrease in interest income.
Spark’s Take on HOMB Stock
According to Spark, TipRanks’ AI Analyst, HOMB is a Outperform.
Home Bancshares has demonstrated strong financial performance, driven by robust revenue growth and a solid balance sheet. While technical analysis shows mixed signals, the company’s fair valuation and positive earnings call outlook provide a solid foundation. Recent corporate actions, such as stock buybacks and dividend stability, enhance shareholder value. Overall, the stock presents a balanced opportunity with potential for growth and income.
To see Spark’s full report on HOMB stock, click here.
Executive/Board Changes
Home Bancshares Chairman Tracy M. French to Retire
Neutral
Feb 28, 2025
On February 27, 2025, Tracy M. French announced his decision to retire from his roles as a director of Home BancShares and Chairman of the Board of Centennial Bank, effective April 17, 2025. He will transition to an advisory role for two years, maintaining his salary but foregoing bonuses and change in control benefits, while adhering to non-compete and confidentiality agreements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.