Stellar Bancorp (STEL)
NYSE:STEL
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Stellar Bancorp
(NYSE:STEL)
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Rating:71Outperform
Price Target:
$42.00
▲(10.67% Upside)
Action:Upgraded
Date:05/28/26
The score is driven primarily by solid financial quality (strong cash generation and conservative balance sheet) despite a notable TTM revenue contraction. Technicals are supportive with price above key moving averages, while valuation is only average and corporate-event risk around the merger (lawsuits/comp concerns) tempers the upside.
Positive Factors
Strong cash generation
Stellar’s free cash flow roughly equaling net income and a sharp TTM rebound indicate durable cash conversion. High cash generation supports dividends, debt retirements, and integration costs, improving capital allocation flexibility and cushioning against cyclical credit or funding shocks.
Negative Factors
Large TTM revenue contraction
A near 46% TTM top-line decline is a durable headwind: sustained revenue weakness undermines earnings power and returns on capital. Without clear recoveries in loan growth, fee income, or market share, margin recovery and ability to fund strategic initiatives become materially harder over the coming months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Stellar’s free cash flow roughly equaling net income and a sharp TTM rebound indicate durable cash conversion. High cash generation supports dividends, debt retirements, and integration costs, improving capital allocation flexibility and cushioning against cyclical credit or funding shocks.
Read all positive factors
Stellar Bancorp (STEL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.92B
Dividend Yield1.82%
Average Volume (3M)244.73K
Price to Earnings (P/E)17.3
Beta (1Y)0.72
Revenue Growth-3.22%
EPS Growth-5.50%
CountryUS
Employees1,054
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.05
Shares Outstanding50,920,696
10 Day Avg. Volume238,155
30 Day Avg. Volume244,731
Financial Highlights & Ratios
PEG Ratio-2.09
Price to Book (P/B)0.96
Price to Sales (P/S)2.69
P/FCF Ratio17.29
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue2.59
Enterprise Value/Gross Profit3.70
Enterprise Value/Ebitda10.08
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.22
Revenue Forecast (FY)$445.90M
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 checkin...
How the Company Makes Money
Stellar Bancorp makes money primarily through (1) net interest income and (2) noninterest income. Net interest income is earned from the spread between interest and fees collected on interest-earning assets—mainly commercial and industrial loans a...
Stellar Bancorp Earnings Call Summary
Earnings Call Date:Oct 24, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance, with positive developments in deposit growth, net interest income, and loan origination countered by challenges such as decreased net income, higher expenses, and increased loan payoffs. Overall, the company's strategic position remains strong, but near-term pressures are evident.Positive Updates
Strong Deposit Growth
The company experienced strong deposit growth, with 51% of new deposits coming from new customers. This reflects increased brand awareness and effective market share gains.
Negative Updates
Decrease in Net Income
Third quarter net income decreased to $25.7 million from $26.4 million in the second quarter, with EPS dropping from $0.51 to $0.50.
Read all updates
Q3-2025 Updates
Positive
Negative
Strong Deposit Growth
The company experienced strong deposit growth, with 51% of new deposits coming from new customers. This reflects increased brand awareness and effective market share gains.
Read all positive updates
Company Guidance
During the Stellar Bank Third Quarter Earnings Call for 2025, the management team provided guidance on several key financial metrics. The net interest income for the third quarter was reported at $100.6 million, an increase from $98.3 million in the second quarter, with a net interest margin of 4.2%, slightly up from 4.18% in the previous quarter. The bank's net income was $25.7 million or $0.50 per diluted share, compared to $26.4 million or $0.51 per share in the second quarter. The annualized Return on Average Assets (ROAA) was 0.97%, and the Return on Average Tangible Common Equity (ROATCE) was 11.45%. Stellar Bank also reported a provision for loan losses of $305,000, with net charge-offs totaling $3.3 million for the quarter. The allowance for credit losses on loans stood at $78.9 million, which is 1.1% of loans. The bank's noninterest income was $5 million, down from $5.8 million in the second quarter, primarily due to write-downs on foreclosed assets. Noninterest expenses increased to $73.1 million from $70 million, attributed to higher salaries, benefits, and professional fees. The tangible book value per share increased by 9.3% year-over-year to $21.08 per share, and the total risk-based capital ratio improved to 16.33%. The management expressed confidence in their liquidity, capital position, and the strength of their balance sheet, emphasizing a focus on disciplined growth and shareholder value enhancement.Stellar Bancorp Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 592.03M | 596.26M | 625.45M | 615.38M | 343.35M | 261.75M |
| Gross Profit | 414.05M | 413.25M | 433.92M | 452.38M | 258.60M | 239.45M |
| EBITDA | 152.16M | 127.78M | 176.99M | 196.35M | 76.78M | 107.44M |
| Net Income | 105.14M | 102.87M | 115.00M | 130.50M | 51.43M | 81.55M |
Balance Sheet | ||||||
| Total Assets | 10.89B | 10.81B | 10.91B | 10.65B | 10.90B | 7.10B |
| Cash, Cash Equivalents and Short-Term Investments | 2.03B | 2.22B | 2.10B | 1.79B | 2.18B | 2.53B |
| Total Debt | 175.26M | 40.23M | 70.11M | 159.76M | 173.29M | 212.94M |
| Total Liabilities | 9.22B | 9.14B | 9.30B | 9.13B | 9.52B | 6.29B |
| Stockholders Equity | 1.67B | 1.67B | 1.61B | 1.52B | 1.38B | 816.47M |
Cash Flow | ||||||
| Free Cash Flow | 117.65M | 92.61M | 127.96M | 161.36M | 105.25M | 104.45M |
| Operating Cash Flow | 119.19M | 97.00M | 132.62M | 168.22M | 109.07M | 107.38M |
| Investing Cash Flow | -463.77M | -348.22M | 246.09M | 295.25M | 73.76M | -754.82M |
| Financing Cash Flow | 333.58M | -240.55M | 133.27M | -435.94M | -568.63M | 982.19M |
Stellar Bancorp Technical Analysis
Positive
37.95
Price Trends
37.01
Positive
36.35
Positive
33.36
Positive
Market Momentum
0.04
Negative
51.64
Neutral
87.39
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 37.95 is above the 20-day moving average (MA) of 37.22, above the 50-day MA of 37.01, and above the 200-day MA of 33.36, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 51.64 is Neutral, neither overbought nor oversold. The STOCH value of 87.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEL.
Stellar Bancorp Risk Analysis
Stellar Bancorp disclosed 63 risk factors in its most recent earnings report. Stellar Bancorp 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
Stellar Bancorp Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.79B | 10.51 | 12.89% | 2.37% | 4.51% | 14.48% | |
76 Outperform | $1.65B | 11.82 | 11.95% | 2.89% | 31.27% | 45.08% | |
76 Outperform | $1.51B | 13.73 | 14.79% | 3.37% | -0.58% | 22.18% | |
71 Outperform | $1.92B | 17.34 | 6.38% | 1.82% | -3.22% | -5.50% | |
69 Neutral | $1.90B | 17.98 | 7.35% | 3.07% | 3.09% | -7.54% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $2.12B | 33.84 | 4.87% | ― | 12.80% | ― |
* Financial Sector Average
STEL
Stellar Bancorp
37.32
10.88
41.13%
SRCE
1St Source
73.70
14.48
24.46%
GABC
German American Bancorp
43.48
6.07
16.24%
LKFN
Lakeland Financial
60.22
2.14
3.69%
NBHC
National Bank Holdings
41.97
6.71
19.05%
CLBK
Columbia Financial
19.98
5.69
39.82%
Stellar Bancorp Corporate Events
Executive/Board ChangesM&A TransactionsShareholder Meetings
Stellar Bancorp Shareholders Approve Merger With Prosperity Bancshares
Positive
May 27, 2026
On May 27, 2026, Stellar Bancorp shareholders held a special meeting to vote on a proposed merger with fellow Texas banking group Prosperity Bancshares, Inc., under a merger agreement first announced on January 27, 2026. With approximately 77.3% o...
Dividends
Stellar Bancorp Declares Quarterly Cash Dividend for Shareholders
Positive
May 20, 2026
On May 20, 2026, Stellar Bancorp, Inc. announced that its Board of Directors declared a quarterly cash dividend of $0.15 per share of common stock. The dividend is payable on June 26, 2026, to shareholders of record as of the close of business on ...
Legal ProceedingsM&A TransactionsShareholder Meetings
Stellar Bancorp Faces Shareholder Suits Over Prosperity Merger
Negative
May 20, 2026
Stellar Bancorp, Inc., a Texas-based banking company operating through Stellar Bank, agreed on January 27, 2026 to merge with Prosperity Bancshares, Inc., with Stellar to be absorbed into Prosperity and Stellar Bank to be consolidated into Prosper...
Business Operations and StrategyFinancial DisclosuresM&A TransactionsShareholder Meetings
Stellar Bancorp Reports Strong Q1 Results, Advances Merger
Positive
Apr 28, 2026
On April 28, 2026, Stellar Bancorp reported first-quarter 2026 net income of $27.0 million, or $0.53 per diluted share, up from $26.1 million, or $0.51 per share, in the fourth quarter of 2025, supported by loan growth of $287.4 million and a mode...
Business Operations and Strategy
Stellar Bancorp Redeems Subordinated Notes, Streamlining Capital Structure
Positive
Apr 1, 2026
On April 1, 2026, Stellar Bancorp, Inc. fully redeemed the remaining $30.0 million principal amount of its 4.70% fixed-to-floating rate subordinated notes due 2029. The redemption price equaled 100% of the principal plus accrued and unpaid interes...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.