Stellar Bancorp (STEL) AI Stock Analysis

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Stellar Bancorp

(NYSE:STEL)

74Outperform

Stellar Bancorp maintains a strong financial foundation with robust growth in revenue and profitability, supported by a healthy balance sheet. While technical indicators show a neutral trend, the fair valuation and positive earnings outlook present a balanced investment case. However, caution is warranted due to economic uncertainties and recent challenges in net interest income.

Stellar Bancorp (STEL) vs. S&P 500 (SPY)

Market Cap

$1.30B

Dividend Yield2.09%

Average Volume (3M)256.18K

Price to Earnings (P/E)11.7

Beta (1Y)0.88

Revenue Growth-0.58%

EPS Growth-3.02%

CountryUS

Employees1,054

SectorFinancial

Sector Strength85

IndustryBanks - Regional

Share Statistics

EPS (TTM)2.17

Shares Outstanding51,473,175

10 Day Avg. Volume194,256

30 Day Avg. Volume256,178

Financial Highlights & Ratios

PEG Ratio1.21

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.19

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.57

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$28.67

Price Target Upside13.28% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Stellar Bancorp Business Overview & Revenue Model

Company DescriptionStellar Bancorp, Inc. (STEL) is a financial holding company that provides a wide range of banking and financial services. As a prominent player in the financial sector, the company operates through its subsidiaries to offer commercial and retail banking services, including loan and deposit products, cash management, and online banking solutions. Stellar Bancorp is dedicated to serving businesses and individuals by facilitating their financial growth and stability.

How the Company Makes MoneyStellar Bancorp generates revenue primarily through the interest income from its loan portfolio, which includes commercial, real estate, and consumer loans. The company also earns money from non-interest income sources such as fees and service charges on deposit accounts, transaction and ATM fees, and income from investments and securities. Additionally, Stellar Bancorp may form strategic partnerships with other financial institutions or service providers to enhance its offerings and expand its market reach, contributing to its overall earnings.

Stellar Bancorp Financial Statement Overview

Summary

Stellar Bancorp exhibits a strong financial position with impressive growth in revenue and profitability. The balance sheet is robust, characterized by no debt, substantial equity, and effective capital management. Cash flows are generally positive, though fluctuations in investing and financing activities could warrant closer monitoring.

Income Statement

Very Positive

Stellar Bancorp has shown strong revenue growth with a consistent increase in total revenue over the years. The net profit margin is solid, indicating efficient cost management. The company has managed to maintain a healthy EBIT margin, although the lack of EBITDA data in recent years could limit a full analysis of operational efficiency.

Balance Sheet

Very Positive

The balance sheet indicates strong financial stability with no total debt and a high equity ratio, reflecting a well-capitalized position. The return on equity remains robust, showcasing effective utilization of shareholder funds. The increasing stockholders' equity further highlights the company's financial health.

Cash Flow

Positive

Stellar Bancorp's cash flow statements depict a stable operating cash flow, with free cash flow remaining positive. There's a noticeable fluctuation in investing and financing cash flows, which may suggest varying capital allocation strategies. The operating cash flow to net income ratio is healthy, supporting the company's profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
602.40M	461.32M	309.31M	140.64M	141.94M
	Gross Profit
602.40M	590.82M	309.31M	140.64M	141.94M
	EBIT
588.85M	177.44M	96.56M	45.52M	32.40M
	EBITDA
0.00	196.35M	0.00	0.00	38.00M
	Net Income Common Stockholders
115.00M	130.50M	51.43M	35.60M	26.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.09B	1.52B	2.18B	1.31B	538.01M
	Total Assets
10.91B	10.65B	10.90B	4.49B	3.95B
	Total Debt
70.11M	159.76M	173.29M	64.14M	66.45M
	Net Debt
-419.97M	-239.47M	-198.41M	-886.00M	-471.56M
	Total Liabilities
9.30B	9.13B	9.52B	64.14M	66.45M
	Stockholders Equity
1.61B	1.52B	1.38B	562.13M	546.45M
Cash Flow		Free Cash Flow
132.62M	161.36M	105.25M	34.05M	26.80M
	Operating Cash Flow
132.62M	168.22M	109.07M	34.81M	40.36M
	Investing Cash Flow
246.09M	295.25M	73.76M	-133.96M	-304.41M
	Financing Cash Flow
133.27M	-435.94M	-568.63M	511.29M	429.99M

Stellar Bancorp Technical Analysis

Technical Analysis Sentiment

Negative

Last Price25.31

Price Trends

50DMA

27.11

Negative

100DMA

27.96

Negative

200DMA

27.23

Negative

Market Momentum

MACD

-0.32

Negative

RSI

41.97

Neutral

STOCH

45.51

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEL, the sentiment is Negative. The current price of 25.31 is below the 20-day moving average (MA) of 25.87, below the 50-day MA of 27.11, and below the 200-day MA of 27.23, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 41.97 is Neutral, neither overbought nor oversold. The STOCH value of 45.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STEL.

Stellar Bancorp Risk Analysis

Stellar Bancorp disclosed 57 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

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUBI	74 Outperform	$1.56B	12.39	8.14%	―	-5.61%	-44.11%
STEL	74 Outperform	$1.30B	11.67	7.40%	2.09%	-0.58%	-3.02%
SRCE	74 Outperform	$1.48B	10.44	12.84%	2.45%	9.30%	15.19%
GABC	71 Outperform	$1.38B	13.01	8.85%	3.01%	11.44%	-2.75%
STBA	70 Outperform	$1.26B	9.65	9.84%	3.72%	1.26%	―
NBHC	70 Outperform	$1.37B	12.39	8.70%	3.23%	1.74%	-16.68%
Sector *	63 Neutral	$12.37B	9.56	7.95%	79.17%	12.62%	-5.26%

* Financial Sector Average

Performance Comparison

STEL

Stellar Bancorp

25.31

3.56

16.37%

SRCE

1St Source

60.61

12.21

25.23%

GABC

German American Bancorp

37.73

6.90

22.38%

STBA

S&T Bancorp

37.17

8.06

27.69%

CUBI

Customers Bancorp

50.67

5.00

10.95%

NBHC

National Bank Holdings

36.44

4.59

14.41%

Stellar Bancorp Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: -6.26%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong financial results, including significant net income, reduced expenses, and successful share repurchases, contributing to a positive outlook. However, challenges such as decreased net interest income, economic uncertainties, and elevated loan payoffs suggest some caution. The bank remains optimistic about future growth, particularly in the later half of the year.

Q1-2025 Updates

Positive Updates

Strong First Quarter Net Income

First quarter 2025 net income of $24.7 million or $0.46 per diluted share, with an annualized return on average assets of 94 basis points and an annualized return on average tangible common equity of 11.48%.

Reduction in Noninterest Expenses

Noninterest expense for the quarter was down $5.1 million to $70.2 million from $75.3 million in the fourth quarter, reflecting timing-driven dynamics and focus on expense management.

Successful Share Repurchases

Repurchased 1.4 million shares at a weighted average price of $27.99 per share during the first quarter and an additional 679,000 shares at $25.83 per share since the end of the first quarter.

Improvement in Deposit Cost

14 basis point improvement in the cost of funds, driven by a 21 basis point improvement in the cost of interest-bearing liabilities.

Regulatory Capital Ratios Growth

Total risk-based capital was 15.94% at the end of the first quarter. Year over year, tangible book value per share increased by 14.3% from $17.23 to $19.69 per share.

Negative Updates

Decrease in Net Interest Income

Net interest income for the quarter was $99.3 million, a decrease from $103 million in the fourth quarter due to lower purchasing accounting accretion and two fewer days to earn interest.

Economic Uncertainty and Loan Growth Delay

Economic uncertainty and new tariff policies have introduced challenges, with growth expected to be pushed to the third and fourth quarters of the year.

Loan Portfolio Challenges

Loan payoffs and paydowns remain elevated, impacting loan growth; $275 to $300 million per quarter in payoffs.

Slight Increase in Provision for Loan Losses

Provision for loan losses in the first quarter was $3.6 million, with an increase in allowance for credit losses on loans to $83.7 million or 1.15% of loans.

Company Guidance

During the Stellar Bancorp, Inc. first quarter 2025 earnings call, the company provided guidance indicating cautious optimism for future growth, likely to accelerate in the latter half of the year. The first quarter net income was $24.7 million, or $0.46 per diluted share, with an annualized return on average assets of 94 basis points and an annualized return on average tangible common equity of 11.48%. Net interest income for the quarter was $99.3 million, down from $103 million in the previous quarter, resulting in a net interest margin of 4.2%. The company highlighted a reduction in noninterest expenses and significant share repurchases, amounting to 1.4 million shares at an average price of $27.99 per share. The allowance for credit losses increased to $83.7 million, or 1.15% of loans. Total risk-based capital stood at 15.94%, and tangible book value per share rose by 14.3% year-over-year to $19.69. Despite broader economic uncertainties, Stellar Bancorp is well-positioned for incremental growth and continues to focus on core operations and capital optimization strategies, including a new share repurchase program of up to $65 million.

Stellar Bancorp Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures

Stellar Bancorp Reports Q1 2025 Financial Results

Neutral

Apr 25, 2025

Stellar Bancorp reported its first quarter 2025 financial results, showing a slight decrease in net income to $24.7 million compared to the previous quarter. The company is focusing on growth and adapting to market conditions, despite uncertainties introduced by tariffs. Stellar Bancorp’s financial highlights include a solid net interest margin and a strong capital position, although total assets and deposits decreased due to seasonal factors and competitive market conditions. The company also repurchased shares and announced a new share repurchase program. Nonperforming assets increased, leading to a higher provision for credit losses.

Spark’s Take on STEL Stock

According to Spark, TipRanks’ AI Analyst, STEL is a Outperform.

Stellar Bancorp demonstrates a strong financial foundation with excellent growth in net income and a robust balance sheet. The stock’s valuation is reasonable, and recent corporate communications underscore solid profitability. However, technical indicators suggest caution due to potential downward momentum. The company’s strategic focus on growth and operational efficiency provides confidence in its future performance.

To see Spark’s full report on STEL stock, click here.

Financial Disclosures

Stellar Bancorp Highlights Strong 2024 Profitability at Conference

Positive

Mar 4, 2025

Stellar Bancorp, Inc. presented its Investor Presentation at the 2025 RBC Capital Markets Global Financial Institutions Conference on March 4, 2025. The presentation highlighted the company’s solid profitability in 2024, with a net income of $115 million and a strong net interest margin. Stellar Bancorp also reported an increase in its total risk-based capital ratio and a decrease in nonperforming loans, indicating a stable financial position and positive growth trajectory.

Business Operations and StrategyFinancial Disclosures

Stellar Bancorp Reports Strong Earnings Despite Challenges

Positive

Jan 30, 2025

Stellar Bancorp, Inc. reported a net income of $27.8 million for the fourth quarter of 2024, and $117.6 million for the full year, reflecting strong profitability and a solid financial foundation. The company experienced a slight decline in net interest margin and net interest income compared to the previous year but maintained a strong capital position with increased book value and reduced nonperforming loans. Stellar’s management is focused on growth and core fundamentals heading into 2025, while also acknowledging challenges such as decreased noninterest income and increased competition in the deposit market.

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.