Live Oak Bancshares Inc (LOB, Financial), a bank holding company specializing in lending and deposit-related services to small businesses nationwide, has seen a significant surge in its stock price over the past three months. The company's stock price has risen by 27.93% over the past three months, reaching a current price of $31.82. This impressive performance has boosted the company's market cap to $1.42 billion. Over the past week, the stock has continued its upward trajectory, gaining 1.72%.
According to GuruFocus.com's GF Value, which calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, Live Oak Bancshares Inc is significantly undervalued. The current GF Value is $48.45, compared to the past GF Value of $45.68 three months ago, indicating that the stock has significant potential for further growth.
Company Overview
Live Oak Bancshares Inc operates as the bank holding company for the Live Oak Banking Company. The company specializes in lending and deposit-related services to small businesses nationwide. The company identifies and extends lending to credit-worthy borrowers both within specific industries, also called verticals, through expertise within those industries, and more broadly to select borrowers outside of those industries. A portion of the loans originated by the Bank are partially guaranteed by the Small Business Administration under the 7(a) Loan Program and the U.S. Department of Agriculture Rural Energy for America Program, Water and Environmental Program, Business and Industry and Community Facilities loan programs.
Profitability Analysis
Live Oak Bancshares Inc has a Profitability Rank of 6/10, indicating a moderate level of profitability. The company's ROE (Return on Equity) is 7.71%, which is better than 30.64% of companies in the industry. The company's ROA (Return on Assets) is 0.63%, which is better than 29.24% of companies in the industry. The company has consistently been profitable over the past 10 years, which is better than 99.93% of companies in the industry.
Growth Prospects
Live Oak Bancshares Inc has a Growth Rank of 8/10, indicating strong growth. The company's 3-year and 5-year revenue growth rates per share are 21.10% and 17.30% respectively, outperforming a majority of companies in the industry. The company's 3-year and 5-year EPS without NRI growth rates are 107.30% and 20.20% respectively, also outperforming a majority of companies in the industry.
Major Stock Holders
The top three holders of Live Oak Bancshares Inc's stock are Diamond Hill Capital (Trades, Portfolio) (5.12%), Barrow, Hanley, Mewhinney & Strauss (3.35%), and HOTCHKIS & WILEY (0.71%).
Competitive Landscape
Live Oak Bancshares Inc operates in a competitive industry, with main competitors including Renasant Corp (RNST, Financial) with a market cap of $1.47 billion, Provident Financial Services Inc (PFS, Financial) with a market cap of $1.22 billion, and Hope Bancorp Inc (HOPE, Financial) with a market cap of $1.12 billion.
Conclusion
In conclusion, Live Oak Bancshares Inc's stock has performed exceptionally well over the past three months, gaining 27.93%. The company's strong profitability and growth, coupled with its undervalued status according to the GF Value, make it an attractive investment opportunity. Despite operating in a competitive industry, Live Oak Bancshares Inc has managed to carve out a niche for itself and deliver consistent profitability and growth. Investors should keep a close eye on this stock as it continues its upward trajectory.
