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4 Reasons to Invest in Equity Bancshares (EQBK) Stock Right Now

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Equity Bancshares, Inc. (EQBK - Free Report) stock looks like an attractive pick right now, given its solid fundamentals and good growth prospects.

With the expectation of more rate hikes this year (in addition to those in March and May), bank stocks are expected to benefit. Thus, investing in banks seems to be a good decision right now and one such bank is EQBK.

The company has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for Equity Bancshares’ 2022 earnings has been revised 15.8% upward. Thus, the company currently sports a Zacks Rank #1 (Strong Buy).

Looking at its price performance, shares of EQBK have gained 7.5% over the past three months against the 6.1% decline recorded by the industry.

 

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Image Source: Zacks Investment Research

 

We have mentioned some aspects below that make Equity Bancshares a solid pick now.

Earnings Growth: The company’s earnings witnessed growth of 10.4% in the last three-five years. While earnings are expected to decline 16.6% in 2022, the trend will likely reverse after that. In 2023, earnings are projected to increase 5.2%.

Moreover, EQBK has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 64.1%.

Revenue Strength: Equity Bancshares’ revenues witnessed a compound annual growth rate of 12.6% over the last five years (2017-2021). The top line is expected to continue to grow in the near term, which can be seen from the projected sales growth rates of 8.9% for 2022 and 5.3% for 2023.

Superior Return on Equity (ROE): Equity Bancshares currently has an ROE of 14.14%, higher than the industry average of 11.59%. This shows that the company reinvests its cash more efficiently than its peers.

Valuation Favorable: Equity Bancshares stock looks undervalued right now when compared with its peers. It has a price/cash flow ratio of 7.47, lower than the industry average of 8.61. Also, its price/sales ratio of 2.64 compares favorably with the industry’s 2.83.

Other Key Picks

A couple of other top-ranked stocks from the same space are S&T Bancorp, Inc. (STBA - Free Report) and Arrow Financial Corporation (AROW - Free Report) . STBA currently sports a Zacks Rank #1, while AROW carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for S&T Bancorp’s current-year earnings has been revised 12% upward over the past 60 days. Over the past year, STBA’s share price has declined 15.4%.

Arrow Financial’s current-year earnings estimates have been revised 3.2% upward over the past 60 days. AROW’s shares have lost 7.7% over the past year.


In-Depth Zacks Research for the Tickers Above


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S&T Bancorp, Inc. (STBA) - free report >>

Arrow Financial Corporation (AROW) - free report >>

Equity Bancshares, Inc. (EQBK) - free report >>