Eastern Bankshares, Inc. Fundamental Analysis
Eastern Bankshares, Inc. (EBC) shows moderate financial fundamentals with a PE ratio of 12.00, profit margin of 26.46%, and ROE of 9.21%. The company generates $1.5B in annual revenue with weak year-over-year growth of -1.35%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 43.8/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze EBC's fundamental strength across five key dimensions:
Efficiency Score
WeakEBC struggles to generate sufficient returns from assets.
Valuation Score
ExcellentEBC trades at attractive valuation levels.
Growth Score
WeakEBC faces weak or negative growth trends.
Financial Health Score
ModerateEBC shows balanced financial health with some risks.
Profitability Score
ModerateEBC maintains healthy but balanced margins.
Key Financial Metrics
Is EBC Expensive or Cheap?
P/E Ratio
EBC trades at 12.00 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, EBC's PEG of 0.00 indicates potential undervaluation.
Price to Book
The market values Eastern Bankshares, Inc. at 1.04 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.81 times EBITDA. This is generally considered low.
How Well Does EBC Make Money?
Net Profit Margin
For every $100 in sales, Eastern Bankshares, Inc. keeps $26.46 as profit after all expenses.
Operating Margin
Core operations generate 26.18 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.21 in profit for every $100 of shareholder equity.
ROA
Eastern Bankshares, Inc. generates $1.21 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Eastern Bankshares, Inc. generates strong operating cash flow of $390.92M, reflecting robust business health.
Free Cash Flow
Eastern Bankshares, Inc. generates strong free cash flow of $369.39M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.60 in free cash annually.
FCF Yield
EBC converts 7.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.004
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.004
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.04
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How EBC Stacks Against Its Sector Peers
| Metric | EBC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.00 | 19.54 | Better (Cheaper) |
| ROE | 9.21% | 805.00% | Weak |
| Net Margin | 26.46% | -7646.00% (disorted) | Strong |
| Debt/Equity | 0.16 | 1.08 | Strong (Low Leverage) |
| Current Ratio | 0.03 | 610.30 | Weak Liquidity |
| ROA | 1.21% | -20979.00% (disorted) | Weak |
EBC outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Eastern Bankshares, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
44.76%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
209.73%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
394.25%
Industry Style: Value, Dividend, Cyclical
High Growth