| 2020 | 2021 | 2022 | 2023 (projected) | Share Based Compensation | 2.05 M | 2.35 M | 2.44 M | 2.46 M | Net Cash Flow from Operations | 49.03 M | 55.72 M | 51.2 M | 47.42 M |
Is Home Bancorp (USA Stocks:HBCP) outlook still optimistic based on the latest debt level?
 | By Vlad Skutelnik | Macroaxis Story |
Home Bancorp (HBCP), a key player in the Banks-Regional industry, presents an intriguing investment opportunity, given its current financial leverage. With Net Borrowings of $204M and Short Long Term Debt Total of $390.8M, the company's debt levels are substantial. However, it is important to note that HBCP also holds a significant amount of assets, including Other Assets worth $2B and Net Tangible Assets of $242M. The company's Net Income stands at $34.1M, which, when juxtaposed with its liabilities, suggests a manageable debt-income ratio. Furthermore, the company's Total Stockholder Equity is $330M, providing a buffer against potential losses. Home Bancorp's future outlook is also promising, with an Analyst Overall Consensus rating of 'Buy' and an estimated Analyst Target Price of $38. The company's forward dividend rate is 1, with a yield of 0.029, indicating potential for regular income for investors. However, it's crucial to consider the company's cash flow situation. With a Change In Cash of -$514M and Cash And Cash Equivalents Changes of -$514M, the company's liquidity could be a concern. In conclusion, while Home Bancorp's debt levels are significant, its solid asset base, income levels, and positive analyst consensus suggest that it could be a viable investment opportunity. However, potential investors should closely monitor the company's cash flow situation. Home Bancorp is set to announce its earnings tomorrow, with the upcoming quarterly report expected on July 17, 2023. The company's Enterprise Value over EBIT is currently relatively stable compared to the previous year. Last year, Home Bancorp reported an Enterprise Value over EBIT of 5.40. As of July 16, 2023, the Enterprise Value over EBITDA is projected to increase to 6.85, while Earnings Before Tax are expected to slightly exceed $39.1 million. Despite many aggressive traders entering the thrifts and mortgage finance space, Home Bancorp may not necessarily be your top choice. We will examine whether the company can maintain a manageable level of debt while minimizing operational losses.
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Reviewed by Rifka Kats
Home Bancorp (HBCP) exhibits a healthy financial structure with its net tangible assets amounting to 242M, significantly outweighing its intangible assets of 6.5M. The company's retained earnings stand at 206.3M, reflecting a strong history of profitability, with a net income from continuing operations of 34.1M. However, the company's total cash flows from investing activities reported a loss of 495.4M, largely due to other cash flows from investing activities reporting a loss of 29.6M. Despite this, the company's risk-adjusted performance of 0.0354 and a forward dividend yield of 0.029 indicate a potentially profitable investment. It is crucial for investors to assess these factors and their tolerance for risk before investing in Home Bancorp's stock.
Rigorous look
Home Bancorp currently holds $390.76 million in liabilities, with a Debt to Equity (D/E) ratio of 8.4. This suggests that Home Bancorp may face challenges in generating sufficient cash to meet its financial obligations. The company has a performance score of 4 on a scale of 0 to 100. Home Bancorp's Market Volatility, also known as Beta, is 2.0171. This indicates a somewhat significant risk relative to the market. To understand what this Beta means for Home Bancorp, consider that as the market rises, the company is expected to outperform it. However, if the market yields negative returns, Home Bancorp is likely to underperform. While it's crucial to consider Home Bancorp's current price history, it's equally important to be realistic about the equity's current price movements. The approach to predicting the future performance of any stock involves a comprehensive evaluation of the business as a whole, its past performance, and all available fundamental and technical indicators. By assessing Home Bancorp's technical indicators, you can currently determine if the expected return of 0.14% will be sustainable in the future. At present, Home Bancorp has a risk of 2.45%. Please review Home Bancorp's Jensen Alpha, as well as the relationship between the potential upside and skewness, to decide if Home Bancorp will continue to follow its current trending patterns.Home Bancorp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Home Bancorp, including all of Home Bancorp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Home Bancorp assets, the company is considered highly leveraged. Understanding the composition and structure of overall Home Bancorp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Understanding Home Total Liabilities
Home Bancorp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Home Bancorp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Home Bancorp balance sheet include debt obligations and money owed to different Home Bancorp vendors, workers, and loan providers. Below is the chart of Home short long-term liabilities accounts currently reported on its balance sheet. You can use Home Bancorp financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Home Bancorp's Liquidity
Home Bancorp financial leverage refers to using borrowed capital as a funding source to finance Home Bancorp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Home Bancorp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Home Bancorp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Home Bancorp's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Home Bancorp's total debt and its cash.
Is Home Bancorp valued sensibly by the market?
The modest gains experienced by current holders of Home Bancorp may raise some interest from retail investors. The stock closed today at a share price of 34.45 on very low momentum in trading volume. The company directors and management have been quite successful in maneuvering the stock at opportune times to take advantage of all market conditions in June. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.45. The current volatility is consistent with the ongoing market swings in June 2023 as well as with Home Bancorp unsystematic, company-specific events.
Home Bancorp (HBCP), a key player in the financial services sector, has shown a steady performance with a five-year return of 2.30%. The company's net asset stands at a robust $3.23B, backed by total assets of $3.23B, indicating a solid financial position. However, the company's total debt of $390.76M and net debt of $303M could be a cause for concern.The company's EBITDA of $53.88M and operating income of $52.3M demonstrate its ability to generate consistent profits. Home Bancorp's net interest income of $118M further strengthens its financial standing. However, the company's probability of bankruptcy stands at 46.23%, which may be a potential risk for investors. Home Bancorp's price to earnings ratio stands at 10.76X, which is relatively low, suggesting that the stock may be undervalued. The company's beta of 0.67 indicates lower volatility compared to the market, making it a potentially safer investment. In conclusion, while Home Bancorp's debt levels may be a concern, its strong financial performance and potential undervaluation make it an investment worth considering. However, investors should also consider the company's bankruptcy risk before making a decision. .
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