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First BanCorp. (FBP) Hits Fresh High: Is There Still Room to Run?

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Have you been paying attention to shares of First Bancorp (FBP - Free Report) ? Shares have been on the move with the stock up 12% over the past month. The stock hit a new 52-week high of $18.62 in the previous session. First Bancorp has gained 10.9% since the start of the year compared to the 5.1% move for the Zacks Finance sector and the 1.7% return for the Zacks Banks - Southeast industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 23, 2024, First Bancorp reported EPS of $0.44 versus consensus estimate of $0.38 while it beat the consensus revenue estimate by 0.57%.

For the current fiscal year, First Bancorp is expected to post earnings of $1.76 per share on $930.33 million in revenues. This represents a 3.51% change in EPS on a 0.06% change in revenues. For the next fiscal year, the company is expected to earn $1.88 per share on $945.22 million in revenues. This represents a year-over-year change of 6.21% and 1.6%, respectively.

Valuation Metrics

First Bancorp may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

First Bancorp has a Value Score of B. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 10.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11.5X. On a trailing cash flow basis, the stock currently trades at 9.3X versus its peer group's average of 8.9X. Additionally, the stock has a PEG ratio of 1.5. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, First Bancorp currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if First Bancorp passes the test. Thus, it seems as though First Bancorp shares could have a bit more room to run in the near term.

How Does FBP Stack Up to the Competition?

Shares of FBP have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Bank7 Corp. (BSVN - Free Report) . BSVN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of D.

Earnings were strong last quarter. Bank7 Corp. beat our consensus estimate by 16.35%, and for the current fiscal year, BSVN is expected to post earnings of $4.05 per share on revenue of $93.5 million.

Shares of Bank7 Corp. have gained 7.9% over the past month, and currently trade at a forward P/E of 7.34X and a P/CF of 9.11X.

The Banks - Southeast industry may rank in the bottom 57% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for FBP and BSVN, even beyond their own solid fundamental situation.

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