Heritage Commerce (HTBK) AI Stock Analysis

• Market Cap: $660.02M
• Dividend Yield: 4.78%
• Average Volume (3M): 394.92K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.80
• Revenue Growth: 8.23%
• EPS Growth: -0.07%
• Country: US
• Employees: 350
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.24
• Shares Outstanding: 61,283,543
• 10 Day Avg. Volume: 375,206
• 30 Day Avg. Volume: 394,924
• PEG Ratio: -0.38
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 2.29
• P/FCF Ratio: 15.39
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.41
• Enterprise Value/Gross Profit: 3.41
• Enterprise Value/Ebitda: 10.00
• 1Y Price Target: $11.88
• Price Target Upside: 9.09% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.71
• Revenue Forecast (FY): $191.99M

• Rating: 76 Outperform
• Price Target: $11.50 ▲(5.60% Upside)

Heritage Commerce's overall stock score is driven by strong financial performance and a fair valuation, with technical analysis providing a cautiously optimistic outlook. The company's robust profitability and effective cash management are significant strengths, while the neutral technical indicators suggest a balanced risk-reward profile.

Positive Factors

Revenue Growth

Consistent revenue growth indicates the company's ability to expand its market presence and sustain its business model over time, enhancing long-term prospects.

Cash Generation

Strong cash generation supports operational flexibility and investment in growth opportunities, ensuring financial health and sustainability.

Financial Stability

A low debt-to-equity ratio enhances financial stability, reducing risk and providing a solid foundation for long-term growth and resilience.

Negative Factors

Gross Profit Margin Pressure

Declining gross profit margins could indicate rising costs or pricing pressures, potentially impacting profitability if not managed effectively.

Return on Equity

Lower return on equity may indicate challenges in efficiently utilizing shareholder capital, which could affect investor confidence and future capital raising.

Free Cash Flow Decline

A decline in free cash flow growth could limit the company's ability to fund new projects or return capital to shareholders, impacting long-term strategic initiatives.

Heritage Commerce Business Overview & Revenue Model

Company Description

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California. Its deposit products for business banking and retail markets include interest and non-interest bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company's loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier's checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. The company operates through 17 full-service branch offices located in the general San Francisco Bay Area of California. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

How the Company Makes Money

Heritage Commerce generates revenue primarily through interest income earned from loans and fees associated with its banking services. The main revenue streams include interest from commercial loans, which are extended to businesses for various purposes such as working capital and equipment purchases, as well as interest from residential mortgages and consumer loans. Additionally, the company earns non-interest income from service fees on deposit accounts, transaction fees, and wealth management services. Strategic partnerships with local businesses and community organizations also enhance customer acquisition and retention, further contributing to its earnings. Overall, the bank's focus on relationship banking allows for a steady flow of income from its diverse portfolio of clients.

Heritage Commerce Financial Statement Overview

Summary

Heritage Commerce demonstrates a stable financial position with strong gross margins and low leverage. However, declining profitability and cash flow growth present challenges. The company needs to address operational efficiency to enhance profitability and cash flow generation.

Income Statement

Heritage Commerce shows a stable revenue growth trajectory with a TTM revenue growth rate of 1.79%. However, the net profit margin has decreased to 8.11% in the TTM from 16.12% in the previous year, indicating pressure on profitability. The gross profit margin remains strong at 68.98%, but the declining EBIT and EBITDA margins suggest rising operational costs.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.057, indicating conservative leverage. The return on equity has decreased to 3.06% in the TTM, reflecting reduced profitability. The equity ratio remains healthy, showcasing strong financial stability.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -4.09% in the TTM, highlighting potential cash management challenges. The operating cash flow to net income ratio is low at 0.0095, suggesting limited cash conversion efficiency. However, the free cash flow to net income ratio remains robust at 98.77%, indicating effective cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	265.21M	251.45M	243.30M	198.94M	162.94M	160.39M
Gross Profit	187.22M	170.26M	191.47M	189.22M	158.95M	138.58M
EBITDA	63.78M	60.20M	93.94M	98.12M	69.94M	53.77M
Net Income	43.33M	40.53M	64.44M	66.56M	47.70M	35.30M
Balance Sheet
Total Assets	5.62B	5.65B	5.19B	5.15B	5.50B	4.63B
Cash, Cash Equivalents and Short-Term Investments	1.10B	1.22B	850.76M	796.20M	1.41B	1.37B
Total Debt	39.77M	39.65M	39.50M	39.35M	39.92M	39.74M
Total Liabilities	4.92B	4.96B	4.52B	4.52B	4.90B	4.06B
Stockholders Equity	700.01M	689.73M	672.90M	632.46M	598.03M	577.89M
Cash Flow
Free Cash Flow	57.16M	37.35M	71.34M	69.07M	56.60M	54.13M
Operating Cash Flow	57.52M	38.97M	73.01M	69.85M	56.85M	57.30M
Investing Cash Flow	-278.54M	110.62M	70.18M	-669.49M	-696.83M	146.38M
Financing Cash Flow	12.45M	410.40M	-41.67M	-399.98M	815.13M	470.02M

Heritage Commerce Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.89
• 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 HTBK, the sentiment is Positive. The current price of 10.89 is above the 20-day moving average (MA) of 10.56, above the 50-day MA of 10.14, and above the 200-day MA of 9.59, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 64.74 is Neutral, neither overbought nor oversold. The STOCH value of 87.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTBK.

Heritage Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTBK	76 Outperform	$660.02M	15.32	6.26%	4.78%	8.23%	-0.07%
SMBC	73 Outperform	$635.55M	10.31	11.54%	1.71%	9.34%	25.21%
SMBK	73 Outperform	$598.94M	12.83	9.01%	0.88%	13.41%	41.78%
SPFI	72 Outperform	$616.44M	10.82	12.97%	1.64%	5.87%	37.99%
HIFS	69 Neutral	$640.21M	14.30	10.23%	0.86%	8.26%	94.53%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MOFG	64 Neutral	$816.44M	14.09	10.01%	2.67%	89.00%	―

Heritage Commerce Corporate Events

Heritage Commerce Corp Reports Strong Q3 Earnings Growth

Heritage Commerce Corp, a bank holding company headquartered in San Jose, California, operates through its subsidiary, Heritage Bank of Commerce, providing a range of financial services with a focus on commercial banking.

Heritage Commerce Announces Dividend and Buyback Increase

On October 23, 2025, Heritage Commerce Corp announced a quarterly cash dividend of $0.13 per share, payable on November 20, 2025, and an increase in its share repurchase program from $15 million to $30 million, extending its term to October 31, 2026. The company reported strong financial results for the third quarter of 2025, with net income of $14.7 million and a 40% increase in earnings per share compared to the previous year. The company experienced growth in loans and deposits, improved asset quality, and expanded its net interest margin, positioning itself for continued profitable growth.

The most recent analyst rating on (HTBK) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Heritage Commerce stock, see the HTBK Stock Forecast page.

Heritage Commerce Announces Executive Retirement Plans

On September 18, 2025, Heritage Commerce Corp announced the upcoming retirement of Deborah K. Reuter, Executive Vice President and Chief Risk Officer, effective January 5, 2026. The company has begun the search for her successor and plans a smooth transition with Ms. Reuter assisting in the process. She will continue as a non-executive employee advisor until March 31, 2026, and will receive compensation based on her current salary.

The most recent analyst rating on (HTBK) stock is a Buy with a $11.50 price target. To see the full list of analyst forecasts on Heritage Commerce stock, see the HTBK Stock Forecast page.

Heritage Commerce Appoints Christopher Abate to Board

On August 18, 2025, Heritage Commerce Corp announced the appointment of Christopher J. Abate to its Board of Directors, expanding the board from eight to nine members. Mr. Abate, a seasoned executive with over 20 years of experience in the financial services industry, is expected to bring valuable expertise in real estate and finance to the company. His appointment is seen as a strategic move to enhance the board’s capabilities and support the company’s growth plans.

The most recent analyst rating on (HTBK) stock is a Buy with a $12.00 price target. To see the full list of analyst forecasts on Heritage Commerce stock, see the HTBK Stock Forecast page.