Stellar Bancorp (STEL) AI Stock Analysis

• Market Cap: $1.96B
• Dividend Yield: 1.82%
• Average Volume (3M): 244.73K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.67
• Revenue Growth: -4.40%
• EPS Growth: -8.80%
• Country: US
• Employees: 1,054
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.59
• Shares Outstanding: 50,759,590
• 10 Day Avg. Volume: 238,155
• 30 Day Avg. Volume: 244,731
• PEG Ratio: -2.09
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 3.87
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 2.45
• Enterprise Value/Gross Profit: 3.53
• Enterprise Value/Ebitda: 9.71
• 1Y Price Target: $44.00
• Price Target Upside: 13.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $41.00 ▲(5.94% Upside)

The score is primarily supported by solid financial strength (low leverage, solid capital structure, and healthy operating margins) and a clear upward price trend. It is tempered by negative revenue growth and signs of near-term technical overextension (high RSI), with only moderate valuation support (mid-teens P/E and a modest dividend yield).

Positive Factors

Strong Deposit Growth

Strong deposit growth indicates increased brand awareness and effective market share gains, supporting long-term financial stability and expansion.

Capital Position Strengthened

A strengthened capital position enhances financial resilience and supports future growth initiatives, ensuring stability in challenging market conditions.

Dividend Increase

The dividend increase reflects a commitment to shareholder value, potentially enhancing investor attractiveness and supporting long-term market positioning.

Negative Factors

Decreased Net Income

A decrease in net income can signal challenges in maintaining profitability, potentially impacting future earnings and investor confidence.

Higher Noninterest Expenses

Rising noninterest expenses can pressure profit margins, necessitating cost management to maintain operational efficiency and long-term profitability.

Loan Payoffs and Paydowns

Increased loan payoffs can hinder loan growth, affecting interest income and potentially constraining revenue expansion in the long term.

Stellar Bancorp Business Overview & Revenue Model

Company Description

Stellar Bancorp, Inc. operates as the bank holding company that provides a range of commercial banking services primarily to small and medium-sized businesses, professionals, and individual customers. It accepts deposit products, including checking accounts, commercial accounts, money market accounts, savings accounts, and other time deposits; and certificates of deposit. The company's loan portfolio comprises commercial and industrial loans; commercial real estate loans, including multi-family residential loans; commercial real estate construction and land development loans; residential real estate loans, such as 1-4 family residential mortgage loans; residential construction loans; and consumer and other loans. In addition, it offers automated teller machine services, drive-through services, and depository facilities; mobile banking services; and telephone, mail, and Internet banking services. Further, the company provides safe deposit boxes, debit cards, cash management and wire transfer services, night depository services, direct deposits, cashier's checks, and letters of credit. It has locations in the Southeast region, including Houston, The Woodlands, Sugar Land, Beaumont, and Port Arthur, as well as Dallas. The company was founded in 2007 and is headquartered in Houston, Texas.

How the Company Makes Money

Stellar Bancorp generates revenue primarily through interest income from loans and mortgages, as well as fees from various banking services. The core revenue streams include interest earned on commercial and consumer loans, residential mortgages, and investment securities. Additionally, the company earns non-interest income through service fees, transaction fees, and wealth management services. Strategic partnerships with local businesses and community organizations also play a significant role in expanding its customer base and enhancing its service offerings, contributing to overall profitability.

Stellar Bancorp Financial Statement Overview

Summary

Solid underlying financial profile: conservative leverage (debt-to-equity 0.042) and a strong capital/equity position (equity ratio 15.6%). Profitability and operating efficiency are healthy (EBITDA margin 26.3%), but revenue growth is negative (-1.26% TTM) and net margin has slipped (16.9% TTM). Cash generation is generally supportive (FCF growth 6.43%, FCF/NI 97.7%) though operating cash flow conversion is flagged as weak.

Income Statement

Stellar Bancorp shows a stable income statement with a strong gross profit margin of 69.2% TTM, indicating efficient cost management. However, the net profit margin has slightly decreased to 16.9% TTM, reflecting a decline in profitability. Revenue growth has been negative at -1.26% TTM, which is a concern for future earnings potential. Despite this, the EBIT and EBITDA margins remain healthy at 21.3% and 26.3% TTM, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.042 TTM, indicating conservative leverage. Return on equity is moderate at 6.3% TTM, suggesting decent profitability relative to shareholder equity. The equity ratio stands at 15.6%, reflecting a solid capital structure with a good proportion of equity financing.

Cash Flow

Cash flow analysis reveals a positive free cash flow growth rate of 6.43% TTM, indicating improved cash generation. The free cash flow to net income ratio is strong at 97.7% TTM, suggesting efficient conversion of earnings into cash. However, the operating cash flow to net income ratio is low, highlighting potential issues in cash flow management.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	596.26M	625.45M	615.38M	343.35M	261.75M
Gross Profit	413.25M	433.92M	452.38M	258.60M	239.45M
EBITDA	127.78M	176.99M	196.35M	76.78M	107.44M
Net Income	102.87M	115.00M	130.50M	51.43M	81.55M
Balance Sheet
Total Assets	10.81B	10.91B	10.65B	10.90B	7.10B
Cash, Cash Equivalents and Short-Term Investments	0.00	2.10B	1.79B	2.18B	2.53B
Total Debt	40.23M	70.11M	159.76M	173.29M	212.94M
Total Liabilities	9.14B	9.30B	9.13B	9.52B	6.29B
Stockholders Equity	1.67B	1.61B	1.52B	1.38B	816.47M
Cash Flow
Free Cash Flow	0.00	127.96M	161.36M	105.25M	104.45M
Operating Cash Flow	0.00	132.62M	168.22M	109.07M	107.38M
Investing Cash Flow	0.00	246.09M	295.25M	73.76M	-754.82M
Financing Cash Flow	0.00	133.27M	-435.94M	-568.63M	982.19M

Stellar Bancorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEL, the sentiment is Positive. The current price of 38.7 is above the 20-day moving average (MA) of 34.20, above the 50-day MA of 32.62, and above the 200-day MA of 29.85, indicating a bullish trend. The MACD of 1.76 indicates Negative momentum. The RSI at 81.26 is Negative, neither overbought nor oversold. The STOCH value of 94.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEL.

Stellar Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRCE	78 Outperform	$1.70B	10.77	12.65%	2.37%	5.09%	15.78%
LKFN	77 Outperform	$1.60B	15.59	13.50%	3.37%	-2.90%	-1.47%
NBHC	77 Outperform	$1.58B	14.69	9.06%	3.07%	-2.46%	-1.98%
GABC	75 Outperform	$1.66B	14.45	10.75%	2.89%	30.45%	3.13%
STEL	73 Outperform	$1.96B	19.47	6.38%	1.82%	-4.40%	-8.80%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CLBK	66 Neutral	$1.91B	35.36	1.34%	―	-3.60%	-8.63%

Stellar Bancorp Corporate Events

Stellar Bancorp to Merge with Prosperity Bancshares

On January 27, 2026, Stellar Bancorp, Inc. agreed to merge with Prosperity Bancshares, Inc. in an all-stock and cash transaction under which Stellar will be combined into Prosperity, followed immediately by the merger of Stellar Bank into Prosperity Bank, leaving Prosperity and its banking subsidiary as the surviving entities. Stellar shareholders are to receive 0.3803 shares of Prosperity common stock plus $11.36 in cash for each Stellar share, with detailed treatment laid out for stock options, restricted stock and performance unit awards, and the combined organization’s governance structure expanded to add two Stellar-affiliated directors to the boards of Prosperity and Prosperity Bank. The deal, unanimously approved by both boards, is subject to customary shareholder, regulatory and stock exchange approvals as well as tax opinions, includes a $78 million termination fee payable by Stellar under certain conditions, and is supported by voting and director support agreements with Stellar directors who control about 8.8% of Stellar’s shares and have agreed to vote in favor of the transaction and observe post-closing non-solicitation and confidentiality restrictions.

The most recent analyst rating on (STEL) stock is a Buy with a $37.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.

Stellar Bancorp Reports Q4 Results, Plans Prosperity Merger

On January 28, 2026, Stellar Bancorp, Inc. reported fourth-quarter 2025 net income of $26.1 million, or $0.51 per diluted share, and full-year 2025 net income of $102.9 million, or $1.99 per diluted share, reflecting solid profitability, stronger net interest margin, and continued balance sheet growth despite a modest decline in annual net interest income. Throughout 2025 the bank improved its book and tangible book value per share, repurchased nearly 300,000 shares, redeemed $30 million of subordinated debt, and grew loans and deposits while maintaining low net charge-offs, though nonperforming assets and the provision for credit losses increased; the company also cancelled its planned January 30, 2026 earnings conference call after announcing a merger agreement with Prosperity Bancshares, signaling a potential strategic shift for shareholders and customers as Stellar prepares to integrate into a larger banking platform.

The most recent analyst rating on (STEL) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.

Prosperity Bancshares to Acquire Stellar Bancorp in Merger

On January 28, 2026, Prosperity Bancshares and Stellar Bancorp announced a definitive agreement, signed January 27, 2026, under which Prosperity will acquire Stellar and Stellar Bank in a stock-and-cash transaction valued at about $2.0 billion based on Prosperity’s prior-day closing share price, with Stellar shareholders to receive 0.3803 Prosperity shares plus cash per Stellar share. Stellar, which reported $10.8 billion in assets, $7.3 billion in loans and $9.0 billion in deposits as of December 31, 2025 and operates 52 branches in the Houston, Beaumont and Dallas markets, will be merged into Prosperity, followed by the merger of Stellar Bank into Prosperity Bank, creating what executives say will be the second-largest Texas-headquartered bank by deposits with more than 330 locations. The deal, unanimously approved by both boards and expected to close in the second quarter of 2026 subject to regulatory and Stellar shareholder approvals, significantly deepens Prosperity’s presence in the high-growth Houston area, brings over $10 billion in assets and a sizable deposit base, and folds Stellar’s leadership into key roles at Prosperity Bank and its board, positioning the combined institution as a larger, relationship-focused community banking franchise in a growing Texas economy while leaving execution, integration and regulatory risks to be managed post-closing.

The most recent analyst rating on (STEL) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.

Stellar Bancorp Increases Quarterly Dividend to $0.15

On November 20, 2025, Stellar Bancorp, Inc. announced an increase in its quarterly cash dividend to $0.15 per share, up from the previous $0.14, payable on December 31, 2025, to shareholders of record as of December 15, 2025. This dividend increase reflects the company’s ongoing commitment to delivering value to its shareholders and may enhance its attractiveness to investors, potentially impacting its market positioning positively.

The most recent analyst rating on (STEL) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.