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Live Oak Bancshares (LOB)
NYSE:LOB
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Live Oak Bancshares
(NYSE:LOB)
64Neutral
Live Oak Bancshares (LOB) vs. S&P 500 (SPY)
Market Cap
$1.27B
Dividend Yield0.43%
Average Volume (3M)219.83K
Price to Earnings (P/E)17.1
Beta (1Y)1.63
Revenue Growth16.48%
EPS Growth3.59%
CountryUS
Employees961
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)1.69
Shares Outstanding45,189,404
10 Day Avg. Volume250,454
30 Day Avg. Volume219,831
Financial Highlights & Ratios
PEG Ratio4.77
Price to Book (P/B)N/A
Price to Sales (P/S)3.02
Price to Cash Flow (P/CF)1.70
P/FCF Ratio1.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$45.00Price Target Upside62.93% Upside
Rating ConsensusHold
Number of Analyst Covering2
Live Oak Bancshares Business Overview & Revenue Model
Company DescriptionLive Oak Bancshares, Inc. is a financial services company headquartered in Wilmington, North Carolina. It primarily operates through its subsidiary, Live Oak Bank, which focuses on providing lending solutions to small and medium-sized enterprises (SMEs) across the United States. The bank specializes in offering Small Business Administration (SBA) loans, commercial loans, and other financial services tailored to the needs of small business owners in various sectors including veterinary, pharmacy, and agriculture.
How the Company Makes MoneyLive Oak Bancshares generates revenue primarily through the interest income earned on loans it provides to small and medium-sized businesses. The company leverages its expertise in SBA lending to offer competitive loan products, which contribute significantly to its interest income. Additionally, Live Oak earns non-interest income from services such as loan servicing and sales of loans to secondary markets. The company has strategic partnerships with financial technology firms to enhance its digital banking capabilities, further supporting its revenue growth by expanding its reach and efficiency in serving niche business markets.
Live Oak Bancshares Financial Statement Overview
Summary
Live Oak Bancshares demonstrates strong gross profit margins and prudent leverage but faces challenges with revenue growth and free cash flow generation. The balance sheet remains stable with modest leverage, yet profitability metrics suggest room for improvement.Income Statement
Live Oak Bancshares shows a mixed performance with varied results. The gross profit margin is impressive at 174.10% TTM, indicating strong cost management. However, the net profit margin is relatively low at 16.86% TTM, reflecting challenges in converting revenue into profit. The revenue growth rate from 2022 to 2023 is negative, suggesting a decline in sales. EBIT and EBITDA margins are mixed, with EBIT showing a negative margin, highlighting operational inefficiencies.65
Positive
Balance Sheet
The balance sheet reflects moderate financial stability. The debt-to-equity ratio is low at 0.11 TTM, indicating prudent leverage usage. Return on equity stands at 6.23% TTM, showing moderate profitability relative to equity. The equity ratio is 7.99% TTM, which is on the lower side, indicating higher leverage risk.70
Positive
Cash Flow
Cash flow analysis presents some concerns. The free cash flow growth rate is negative, with a decrease from the previous period. The operating cash flow to net income ratio is 8.53 TTM, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio of 7.47 TTM suggests limited free cash flow generation relative to profits.60
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 372.63M | 119.49M | 391.86M | 441.99M | 284.62M | 205.98M | Gross Profit |
| 648.80M | 119.49M | 391.86M | 441.99M | 284.62M | 205.98M | EBIT |
| -92.72M | 103.47M | 327.30M | 210.79M | 47.39M | 23.46M | EBITDA |
| 24.15M | 104.10M | 231.11M | 232.15M | 69.08M | 42.83M | Net Income Common Stockholders |
| 62.84M | 73.90M | 176.21M | 167.00M | 59.54M | 18.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.71B | 89.52M | 1.30B | 1.10B | 1.05B | 674.05M | Total Assets |
| 11.27B | 11.27B | 9.86B | 8.21B | 7.87B | 4.81B | Total Debt |
| 23.35M | 23.35M | 133.20M | 318.29M | 1.54B | 2.63M | Net Debt |
| -559.44M | -559.44M | -151.04M | 126.34M | 1.24B | -131.37M | Total Liabilities |
| 23.35M | 10.37B | 9.04B | 7.50B | 7.30B | 2.63M | Stockholders Equity |
| 902.67M | 902.67M | 811.03M | 715.13M | 567.85M | 532.39M |
| Cash Flow | Free Cash Flow | ||||
| 469.13M | 573.23M | 80.73M | -122.80M | -293.98M | -531.12M | Operating Cash Flow |
| 536.03M | 620.07M | 124.48M | -119.72M | -272.99M | -493.93M | Investing Cash Flow |
| -1.88B | -1.77B | -1.44B | -149.80M | -2.61B | -673.16M | Financing Cash Flow |
| 1.15B | 1.32B | 1.53B | 154.95M | 2.98B | 1.07B |
Live Oak Bancshares Technical Analysis
Negative
27.62
Price Trends
35.28
Negative
40.18
Negative
40.09
Negative
Market Momentum
-2.07
Positive
18.09
Positive
6.49
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOB, the sentiment is Negative. The current price of 27.62 is below the 20-day moving average (MA) of 31.83, below the 50-day MA of 35.28, and below the 200-day MA of 40.09, indicating a bearish trend. The MACD of -2.07 indicates Positive momentum. The RSI at 18.09 is Positive, neither overbought nor oversold. The STOCH value of 6.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOB.
Live Oak Bancshares Risk Analysis
Live Oak Bancshares disclosed 48 risk factors in its most recent earnings report. Live Oak 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
Live Oak 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.51B | 20.53 | 14.87% | 1.49% | 16.28% | 9.61% | |
72 Outperform | $1.51B | 9.45 | 10.44% | ― | -3.61% | -29.58% | |
69 Neutral | $3.56B | 8.38 | 18.81% | ― | 26.87% | 10.56% | |
64 Neutral | $1.27B | 17.14 | 8.15% | 0.43% | 16.48% | 3.59% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% | |
59 Neutral | $629.76M | ― | -3.76% | 3.61% | 9.77% | -147.04% |
* Financial Sector Average
Performance Comparison
LOB
Live Oak Bancshares
27.62
-11.38
-29.18%
AX
Axos Financial
62.36
11.50
22.61%
EGBN
Eagle Bancorp
20.39
-1.46
-6.68%
CUBI
Customers Bancorp
48.20
-4.05
-7.75%
SFBS
ServisFirst Bancshares
81.18
18.26
29.02%
Live Oak Bancshares Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -32.17% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong operational performance with record loan production and significant deposit growth. However, challenges such as elevated provision expenses and net interest margin compression due to economic headwinds were acknowledged. The bank is optimistic about future growth, supported by investments in AI and technology.Highlights
Record Loan Production
Live Oak Bancshares reported record loan production in 2024 totaling $5.2 billion, a 33% increase compared to 2023, with a strong start in 2025 supported by near all-time high loan pipelines.
Strong Deposit Growth
The bank achieved significant checking account growth, with balances increasing by 46% linked quarter to $212 million, and a 14% customer overlap between loan and deposit accounts.
Increased Loan Origination
Q4 2024 loan origination totaled approximately $1.4 billion, marking a 45% increase compared to Q4 2023, driven by both small business banking and commercial lending teams.
AI and Technology Investment
The bank is heavily investing in AI and technology to streamline processes and improve operational efficiency, positioning it for future growth.
Lowlights
Elevated Provision Expenses
The bank reported elevated provision expenses in Q4 2024 due to increased default activity and challenges within the SBA loan portfolio, driven by economic factors such as rate hikes and inflation.
Net Interest Margin Compression
The net interest margin (NIM) compressed by 18 basis points in Q4 2024, influenced by recent rate cuts and competitive pressures in the deposit market.
High Charge-Offs
Q4 2024 saw a high level of charge-offs as the bank proactively addressed small business defaults and impaired loans.
Company Guidance
During the Q4 2024 earnings call for Live Oak Bancshares, the executives provided comprehensive guidance highlighting significant growth metrics and future outlooks. The company reported strong loan production of $1.4 billion for the quarter, with an impressive 45% increase in loan originations compared to Q4 2023. The loan pipeline reached $3.6 billion, reflecting a 24% year-over-year increase. On the deposit front, checking balances grew by 46% sequentially, reaching approximately $215 million. The percentage of customers with both loan and deposit relationships with Live Oak increased to 14%, nearly triple from 18 months ago. Despite challenges like NIM compression and elevated provision expenses, the company maintained its core PPNR from Q3 2024 and achieved a 15% increase compared to the prior year. Looking ahead, the bank anticipates continued growth in its small dollar SBA 7(a) loan offering, expecting to more than double the $125 million closed in 2024, and aims to expand its checking account balances significantly. The executives emphasized the potential of AI to streamline operations and enhance customer service, positioning Live Oak as America’s small business bank.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.