Driven by organic growth and improving operating environment, First Internet Bancorp (INBK - Free Report) seems to be an attractive pick now. Also, higher interest rates, expectations of lesser regulations and the strengthening of the economy will continue to support the company’s financials.
Analysts seem to be optimistic about First Internet Bancorp’s prospects as the stock is witnessing upward estimate revisions. Over the past 60 days, the Zacks Consensus Estimate for 2017 and 2018 increased 8.6% and 5.3%, respectively. Backed by these upward estimate revisions, the company currently carries a Zacks Rank #2 (Buy).
Further, First Internet Bancorp’s shares have rallied 26.9% over the past year, outperforming the industry’s gain of 15.3%.
Why the Stock is a Solid Pick
Revenue Growth: Organic growth remains strong at First Internet Bancorp. Revenues witnessed a compound annual growth rate of 19.3% over the last five years (2012-2016). Further, the top line is expected to increase 17.6% in 2017 and 21.5% for 2018.
Earnings Strength: First Internet Bancorp has witnessed earnings per share (EPS) growth of nearly 15% in the last three to five years, higher than the industry’s growth of 10.9%. This earnings momentum is likely to continue in the near term, as reflected by the company’s projected EPS growth of 10% and 18.6% for 2017 and 2018, respectively.
Superior Return on Equity: First Internet Bancorp has a return on equity of 9.68% compared with the industry average of 8.59%. This indicates that the company reinvests more efficiently compared to its peers.
Stock Looks Undervalued: The stock looks undervalued with respect to its price-to-earnings and price-to-book ratios. The company’s trailing 12-month P/E and P/S ratios of 12.69 and 1.26, respectively, are below the industry average of 16.55 and 1.39.
Other Stocks Worth a Look
Some other stocks in the same space worth a look are FB Financial Corporation (FBK - Free Report) , Salisbury Bancorp, Inc. (SAL - Free Report) and First Commonwealth Financial Corporation (FCF - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FB Financial’s Zacks Consensus Estimate for current-year earnings was revised 2.7% upward over the past 60 days. Also, its share price has jumped 65.1% over the past year.
Salisbury Bancorp witnessed a 2.4% upward earnings estimates revision for the current year, in the past 60 days. Moreover, in the past year, its shares have gained 44.3%.
First Commonwealth Financial’s earnings estimates for 2017 were revised 1.3% upward, over the last 60 days. Further in the past year, its shares have jumped 21.1%.
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