Merchants Bancorp (MBIN) AI Stock Analysis

• Market Cap: $1.47B
• Dividend Yield: 1.14%
• Average Volume (3M): 174.49K
• Price to Earnings (P/E): 5.1
• Beta (1Y): 1.01
• Revenue Growth: 23.69%
• EPS Growth: 11.97%
• Country: US
• Employees: 663
• Sector: Financial
• Sector Strength: 79
• Industry: Banks - Regional
• EPS (TTM): 6.31
• Shares Outstanding: 45,881,706
• 10 Day Avg. Volume: 217,810
• 30 Day Avg. Volume: 174,491
• PEG Ratio: 0.42
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.66
• Price to Cash Flow (P/CF): -43.90
• P/FCF Ratio: 3.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $47.17
• Price Target Upside: 45.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Merchants Bancorp exhibits strong revenue growth and sound financial health, supported by a robust balance sheet with no debt. However, liquidity challenges indicated by negative cash flows present risks. The stock's low P/E ratio and dividend yield suggest it is undervalued, offering potential for long-term gains. Technical indicators signal a neutral to bearish sentiment, suggesting caution in the short term. The recent executive change is a positive step but does not significantly impact the overall outlook.

Positive Factors

Earnings

Strong gain on sale results drive beat in 4Q24 & 2025/2026 fee estimates.

Financial Performance

Reported EPS of $1.85 beat MS/consensus estimates of $1.34/$1.27 on higher fees/NII and lower provision.

Negative Factors

Credit Quality

Credit trends were still negative with NPLs up for 5th straight quarter.

Stock Performance

Expect stock underperforms given EPS miss and higher NPLs.

Merchants Bancorp Business Overview & Revenue Model

Company Description

Merchants Bancorp operates as the diversified bank holding company in the United States. The company operates through Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. This segment also offers customized loan products for independent living, assisted living, memory care, and skilled nursing projects; and operates as a syndicator of low-income housing tax credit and debt funds. The Mortgage Warehousing segment funds agency eligible residential loans, including origination, purchase, and sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, such as various types of deposit products, as well as multi-family construction and bridge, commercial real estate, commercial and industrial, agricultural, residential mortgage, and consumer loan products. This segment also provides single-family mortgage lending; construction, bridge, and lot financing; first-lien home equity lines of credit; and small business administration lending products and services. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

How the Company Makes Money

Merchants Bancorp makes money through several key revenue streams, including interest income from loans and leasing activities, fee income from mortgage banking operations, and servicing income from its real estate lending and servicing division. The company's primary source of revenue is generated from interest earned on its loan portfolio, which includes commercial and residential real estate loans, as well as consumer and business loans. Merchants Bancorp also earns substantial fee income by originating, selling, and servicing mortgage loans, with a significant focus on multifamily and healthcare facility financing. The bank's strategic partnerships with government-sponsored enterprises and other financial institutions enhance its ability to provide competitive loan products and expand its market reach.

Merchants Bancorp Financial Statement Overview

Summary

Strong revenue growth and stable profitability are evident, supported by a healthy balance sheet with rising equity and no debt. However, cash flow challenges, particularly negative operating and free cash flows, indicate liquidity risks that need to be addressed.

Income Statement

Merchants Bancorp has demonstrated strong revenue growth, with a significant increase in total revenue from 2019 to 2024. The gross profit margin remains high due to the absence of cost of goods sold, typical for banks. Net profit margin has slightly improved from 46.7% in 2019 to 24.6% in 2024, indicating stable profitability. The EBIT margin is consistently high, reflecting efficient operations. However, EBITDA data is missing for 2024, limiting some analysis.

Balance Sheet

The company's balance sheet shows strong equity growth with stockholders' equity increasing from $653.7 million in 2019 to $2.24 billion in 2024. Debt-to-equity ratio has improved significantly with total debt eliminated by 2024, showcasing strong financial management. The equity ratio has increased, indicating robust capitalization. However, the return on equity has decreased from 11.8% in 2019 to 14.3% in 2024, suggesting potential efficiency issues in using equity to generate profits.

Cash Flow

Merchants Bancorp's cash flow statement reveals challenges, with negative operating cash flow in recent years. Free cash flow remains negative, indicating potential liquidity issues. The operating cash flow to net income ratio and free cash flow to net income ratio are concerning, reflecting issues in converting income into cash. Despite improvements in financing activities, the overall cash flow position suggests caution.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.30B	522.51M	427.19M	430.31M	339.78M
	Gross Profit
1.30B	522.51M	427.19M	430.31M	339.78M
	EBIT
1.29B	347.91M	294.61M	307.62M	249.16M
	EBITDA
0.00	0.00	293.63M	307.12M	245.25M
	Net Income Common Stockholders
320.39M	279.23M	219.72M	227.10M	180.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
991.04M	584.42M	345.51M	1.34B	449.53M
	Total Assets
18.81B	16.95B	12.62B	11.28B	9.65B
	Total Debt
4.34B	964.13M	960.39M	1.03B	1.35B
	Net Debt
-10.99M	379.70M	734.23M	1.34M	1.17B
	Total Liabilities
16.56B	15.25B	11.16B	10.12B	1.37B
	Stockholders Equity
2.24B	1.70B	1.46B	1.16B	810.62M
Cash Flow		Free Cash Flow
-835.28M	-363.93M	966.96M	-52.86M	-878.51M
	Operating Cash Flow
-835.28M	-356.40M	975.77M	-49.22M	-874.89M
	Investing Cash Flow
-874.27M	-3.26B	-2.86B	-474.26M	-2.53B
	Financing Cash Flow
1.60B	3.97B	1.08B	1.38B	3.08B

Merchants Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MBIN, the sentiment is Negative. The current price of 32.52 is below the 20-day moving average (MA) of 35.03, below the 50-day MA of 38.17, and below the 200-day MA of 40.76, indicating a bearish trend. The MACD of -1.75 indicates Positive momentum. The RSI at 35.33 is Neutral, neither overbought nor oversold. The STOCH value of 27.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MBIN.

Merchants Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CASH	78 Outperform	$1.68B	10.27	22.65%	0.28%	4.68%	12.30%
OFG	78 Outperform	$1.59B	8.31	16.19%	2.93%	12.13%	10.42%
NIC	78 Outperform	$1.55B	12.70	11.47%	1.04%	24.31%	97.90%
MBIN	72 Outperform	$1.47B	5.09	16.25%	1.14%	23.69%	11.97%
CHCO	68 Neutral	$1.67B	14.41	16.49%	2.65%	11.10%	3.74%
FBNC	64 Neutral	$1.53B	20.13	5.38%	2.37%	-1.53%	-27.00%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%

Merchants Bancorp Corporate Events

Merchants Bancorp Appoints New Chief Accounting Officer

On March 17, 2025, Merchants Bancorp appointed Darin Thomas as its Chief Accounting Officer, taking over the principal accounting officer responsibilities from the current CFO, Sean A. Sievers. Mr. Thomas, previously a Controller at Barclays’ United States Consumer Bank, brings extensive experience in financial processes, which could enhance the company’s financial management and reporting capabilities.