Live Oak Bancshares (LOB) AI Stock Analysis

• Market Cap: $1.69B
• Dividend Yield: 0.33%
• Average Volume (3M): 309.55K
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.99
• Revenue Growth: 10.41%
• EPS Growth: -19.43%
• Country: US
• Employees: 1,008
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.56
• Shares Outstanding: 46,219,604
• 10 Day Avg. Volume: 399,602
• 30 Day Avg. Volume: 309,546
• PEG Ratio: 0.50
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 1.51
• P/FCF Ratio: 10.99
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.71
• Enterprise Value/Gross Profit: 3.53
• Enterprise Value/Ebitda: 9.60
• 1Y Price Target: $44.67
• Price Target Upside: 22.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 2.99
• Revenue Forecast (FY): $661.43M

• Rating: 65 Neutral
• Price Target: $39.00 ▲(6.56% Upside)
• Action: Downgraded Date: 03/02/26
• Date: Action: Downgraded 03/02/26

The score is driven primarily by solid underlying financial health (notably a de-risked, low-leverage balance sheet) and a favorable earnings-call outlook tied to strong loan/deposit momentum and product ramp. Offsetting these positives are weak technicals (trading below key moving averages with subdued momentum) and financial quality concerns around cash-flow volatility and credit/margin timing risks highlighted on the call.

Positive Factors

Conservative balance sheet / Low leverage

Very low debt-to-equity and rising equity provide durable capital buffers that reduce insolvency risk, support regulatory flexibility, and allow the bank to fund loan growth without levering up. This structural strength underpins long-term resilience through business cycles and enables strategic investments.

Sustained loan and deposit growth with cross-sell gains

Consistent, high loan origination and material deposit inflows create durable net interest income potential and improve funding mix. The sharp rise in customers holding both loans and deposits increases lifetime revenue per client and lowers marginal funding costs, supporting more stable margins over time.

Product and tech ramp (Live Oak Express, checking, AI)

Scaling specialty origination channels and digital products diversifies fee streams and gain-on-sale income, while AI/tech investments improve origination efficiency and underwriting. Over the medium term this structural product ramp can boost noninterest income and lower unit costs of acquiring small-business customers.

Negative Factors

Volatile free cash flow and cash generation

A steep recent decline and historical volatility in operating and free cash flow reduce confidence in sustained internal funding for growth, dividends, or buybacks. Persistent variability can force reliance on external funding, constrain opportunistic investments, and complicate long-term planning for capital allocation.

Concentrated SBA exposure and rising nonaccruals

Material SBA concentration elevates idiosyncratic credit risk and can drive episodic reserve build-ups. Rising nonaccruals signal loss emergence in the unguaranteed book, which can pressure earnings and capital over multiple quarters and reduce the predictability of net income and returns.

Margin pressure and gain-on-sale timing volatility

Structural timing mismatches between deposit repricing and loan yield adjustments can compress NIM during rate changes, creating multi-quarter margin headwinds. Combined with seasonality and deliberate shifts in gain-on-sale recognition, this produces persistent revenue and margin variability that complicates earnings visibility.

Live Oak Bancshares Business Overview & Revenue Model

Company Description

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.

How the Company Makes Money

Live Oak Bancshares generates revenue primarily through interest income from loans issued to small businesses, which includes commercial loans, SBA loans, and other specialized lending products. Additionally, the company earns non-interest income through fees associated with its banking services, such as account maintenance fees, transaction fees, and loan origination fees. The bank's focus on technology and online banking allows it to operate with lower overhead costs, which can enhance profit margins. Strategic partnerships with various industry players, including technology platforms and lending networks, further contribute to its revenue streams by expanding its reach and customer base.

Live Oak Bancshares Financial Statement Overview

Summary

Balance sheet strength is a clear positive (very low debt-to-equity and improved capital position), and TTM profitability has improved versus 2024. However, cash-flow consistency is a concern given the sharp recent drop in free cash flow and historical volatility, and returns/margins remain well below 2021–2022 peak levels.

Income Statement

TTM (Trailing-Twelve-Months) revenue rose ~5.0% versus the prior year, with profitability improving from 2024 (net margin ~10.0% vs ~8.3%; EBIT margin ~15.5% vs ~9.6%). That said, profitability is well below the unusually strong 2021–2022 period (net margins ~33–35%), highlighting a less favorable earnings environment versus peak levels.

Balance Sheet

Leverage looks conservative in TTM (Trailing-Twelve-Months) with low debt relative to equity (~0.08x), improved from 2024 (~0.11x) and far better than 2020 (~2.72x). Equity has grown versus prior years, supporting balance sheet resilience, while return on equity is moderate in TTM (~9.1%) and down materially from the 2021–2022 peak (>20%), suggesting profitability is the current constraint rather than leverage.

Cash Flow

TTM (Trailing-Twelve-Months) free cash flow is positive (~$70M) and roughly in line with net income (free cash flow to net income ~0.98x), but the trajectory is weak: free cash flow growth is sharply negative (~-57.8%) versus the prior period and operating cash flow is much lower than 2023–2024. Cash generation has also been volatile historically (negative operating/free cash flow in 2020–2021), which lowers confidence in consistency.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.04B	929.29M	776.55M	508.83M	506.41M
Gross Profit	503.00M	396.61M	382.26M	350.92M	426.77M
EBITDA	185.09M	112.52M	104.10M	231.11M	232.15M
Net Income	103.78M	77.47M	73.90M	176.21M	167.00M
Balance Sheet
Total Assets	15.13B	12.94B	11.27B	9.86B	8.21B
Cash, Cash Equivalents and Short-Term Investments	0.00	634.39M	1.71B	1.30B	1.10B
Total Debt	102.40M	112.82M	23.35M	83.20M	318.29M
Total Liabilities	13.88B	11.94B	10.37B	9.04B	7.50B
Stockholders Equity	1.25B	999.03M	902.67M	811.03M	715.13M
Cash Flow
Free Cash Flow	143.49M	487.16M	573.23M	80.73M	-122.80M
Operating Cash Flow	158.24M	536.47M	620.07M	124.48M	-119.72M
Investing Cash Flow	-1.90B	-2.08B	-1.77B	-1.44B	-149.80M
Financing Cash Flow	2.00B	1.57B	1.32B	1.53B	154.95M

Live Oak Bancshares Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 36.60
• 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 LOB, the sentiment is Negative. The current price of 36.6 is below the 20-day moving average (MA) of 39.99, below the 50-day MA of 38.15, and above the 200-day MA of 33.98, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 39.54 is Neutral, neither overbought nor oversold. The STOCH value of 25.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOB.

Live Oak Bancshares Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STBA	75 Outperform	$1.57B	11.90	9.35%	3.38%	-1.48%	-1.58%
NBHC	68 Neutral	$1.83B	14.01	9.06%	3.07%	-2.46%	-1.98%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HOPE	66 Neutral	$1.46B	23.18	2.65%	4.97%	-7.96%	-52.79%
LOB	65 Neutral	$1.69B	16.24	6.31%	0.33%	10.41%	-19.43%
CCB	58 Neutral	$1.14B	24.59	11.82%	―	-2.11%	6.48%
TFIN	50 Neutral	$1.36B	62.00	1.11%	―	2.04%	-64.17%

Live Oak Bancshares Corporate Events

Live Oak Bancshares Declares Cash Dividends for Shareholders

On February 19, 2026, Live Oak Bancshares, Inc. announced that its board of directors declared a cash dividend of $0.03 per share on its voting common stock, reinforcing its practice of returning capital to common shareholders. The board also approved a cash dividend of $0.52344 per depositary share of its 8.375% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock, with both dividends scheduled to be paid on March 15, 2026 to shareholders of record as of March 5, 2026, underscoring ongoing support for both common and preferred investors.

These dividend declarations highlight the company’s continued capacity and willingness to distribute cash to equity holders, which may signal confidence in its earnings stability and capital position. The move is likely to be viewed positively by income-focused investors who rely on regular dividend payments from both common and preferred securities as part of their return profile.

The most recent analyst rating on (LOB) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Live Oak Bancshares stock, see the LOB Stock Forecast page.

Live Oak Bancshares Grants Long-Term Executive RSU Awards

On February 9, 2026, Live Oak Bancshares’ compensation committee granted discretionary cash bonuses and multi-year restricted stock unit awards to several key executives of Live Oak Bank, including its president, chief financial officer, general counsel and chief information and digital officer, under the company’s 2015 Omnibus Stock Incentive Plan. The RSU awards, which vest in five equal annual installments beginning February 9, 2027 and are forfeited if employment ends before February 9, 2031 in most cases, are designed to strengthen executive retention and align management incentives with shareholders, while the committee reiterated that CEO and chairman James Mahan has not received equity awards since the 2015 IPO due to his already substantial ownership stake.

The structure of the RSU grants, together with associated forfeiture and tax treatment provisions, underscores Live Oak’s emphasis on long-term performance, governance discipline and regulatory compliance in its executive pay practices, potentially reinforcing investor confidence in how the bank links leadership compensation to sustained shareholder value.

The most recent analyst rating on (LOB) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Live Oak Bancshares stock, see the LOB Stock Forecast page.