December 14, 2023
Top 10 Stock Texas Capital Bancshares Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Texas Capital Bancshares – Top 10 Stock in Dow Jones U.S. Regional Banks Index
Texas Capital Bancshares is listed as a top 10 stock on December 14, 2023 in the market index D.J. US Banks because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for Texas Capital Bancshares on December 14, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | Diversity USA, NASDAQ, D.J. US Banks, S&P MIDCAP |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Texas Capital Bancshares Hold
| 360 METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 25 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 89 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 7 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 45 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock Texas Capital Bancshares are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Texas Capital Bancshares. The consolidated Growth Rank has a good rank of 81, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 81% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 89 which means that the company has a financing structure that is safer than 89% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 25 which means that the share price of Texas Capital Bancshares is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 75% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 7, which means that professional investors are more pessimistic about the stock than for 93% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, Texas Capital Bancshares is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 81), and the company is safely financed (Safety Rank of 89). However, professional market sentiment is low(Sentiment Rank of 7). The negative market view on Texas Capital Bancshares may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Texas Capital Bancshares compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Texas Capital Bancshares negative
ANALYSIS: With an Obermatt Sentiment Rank of 7 (better than 7% compared with alternatives), overall professional sentiment and engagement for the stock Texas Capital Bancshares is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Texas Capital Bancshares. Analyst Opinions are at a rank of 39 (worse than 61% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 20 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 44, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 56% of competitors). No wonder, the Professional Investors rank is only 3, which means that professional investors hold less stock in this company than in 97% of alternative investment opportunities. Pros tend to stay away from Texas Capital Bancshares, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 7 (less encouraging than 93% compared with investment alternatives), Texas Capital Bancshares has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Texas Capital Bancshares Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% compared with alternatives), Texas Capital Bancshares shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Texas Capital Bancshares. Price-to-Sales (P/S) is 62, which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value concerning Texas Capital Bancshares's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 62% of alternatives (38% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 9, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 25, is a hold recommendation based on Texas Capital Bancshares's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Texas Capital Bancshares may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Texas Capital Bancshares Growth Momentum high
| GROWTH METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 37 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 51 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 79 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 81 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2023, Texas Capital Bancshares shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Texas Capital Bancshares. Profit Growth has a rank of 100 which means that currently professionals expect the company to grow its profits more than 100% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 51, and Stock Returns has a rank of 79 which means that the stock returns have recently been above 79% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 37 (63% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Texas Capital Bancshares Debt Financing Safety very solid
| SAFETY METRICS | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 28 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 92 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 82 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 89 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 89 (better than 89% compared with alternatives) for 2023, the company Texas Capital Bancshares has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Texas Capital Bancshares is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Texas Capital Bancshares. Refinancing is at 92, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. Liquidity is also good at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 28, which means the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 89 (better than 89% compared with alternatives), Texas Capital Bancshares has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Texas Capital Bancshares could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Texas Capital Bancshares Top Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 25 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 82 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 81 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Texas Capital Bancshares (Regional Banks, USA) shares have much better financial characteristics than comparable stocks. Shares of Texas Capital Bancshares are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 89, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Texas Capital Bancshares's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Texas Capital Bancshares exhibits low value (Obermatt Value Rank of 25), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 89) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.