FIRST MERCHANTS CORP(NASDAQ:FRME) stock Fundamental Analysis

Fundamental Rating

We assign a fundamental rating of 4 out of 10 to FRME. FRME was compared to 405 industry peers in the Banks industry. Both the profitability and financial health of FRME have multiple concerns. FRME has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

1.1 Basic Checks

In the past year FRME was profitable.

In the past year FRME had a positive cash flow from operations.

FRME had positive earnings in each of the past 5 years.

Of the past 5 years FRME 4 years had a positive operating cash flow.

1.2 Ratios

The Return On Assets of FRME (0.97%) is better than 67.17% of its industry peers.

Looking at the Return On Equity, with a value of 7.72%, FRME is in line with its industry, outperforming 45.86% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	0.97%
ROE	7.72%
ROIC	N/A

ROA(3y)1.18%

ROA(5y)1.18%

ROE(3y)9.79%

ROE(5y)9.61%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

FRME's Profit Margin of 28.38% is amongst the best of the industry. FRME outperforms 80.20% of its industry peers.

In the last couple of years the Profit Margin of FRME has declined.

FRME does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	28.38%
GM	N/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3Y-7.92%

PM growth 5Y-3.62%

GM growth 3YN/A

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

FRME does not have a ROIC to compare to the WACC, probably because it is not profitable.

Compared to 1 year ago, FRME has less shares outstanding

FRME has more shares outstanding than it did 5 years ago.

Compared to 1 year ago, FRME has a worse debt to assets ratio.

2.2 Solvency

The Debt to FCF ratio of FRME is 0.87, which is an excellent value as it means it would take FRME, only 0.87 years of fcf income to pay off all of its debts.

FRME's Debt to FCF ratio of 0.87 is fine compared to the rest of the industry. FRME outperforms 79.70% of its industry peers.

FRME has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.

FRME has a better Debt to Equity ratio (0.11) than 72.43% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.11
Debt/FCF	0.87
Altman-Z	N/A

ROIC/WACCN/A

WACC14.06%

2.3 Liquidity

		Industry Rank	Sector Rank
Current Ratio	N/A
Quick Ratio	N/A

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

FRME shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -17.14%.

FRME shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.72% yearly.

FRME shows a decrease in Revenue. In the last year, the revenue decreased by -0.65%.

The Revenue has been growing slightly by 7.84% on average over the past years.

EPS 1Y (TTM)-17.14%

EPS 3Y-5.26%

EPS 5Y-0.72%

EPS Q2Q%-12.64%

Revenue 1Y (TTM)-0.65%

Revenue growth 3Y7.54%

Revenue growth 5Y7.84%

Sales Q2Q%13.17%

3.2 Future

FRME is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.01% yearly.

Based on estimates for the next years, FRME will show a small growth in Revenue. The Revenue will grow by 5.04% on average per year.

EPS Next Y21.99%

EPS Next 2Y14.01%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year6.17%

Revenue Next 2Y5.04%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

FRME is valuated correctly with a Price/Earnings ratio of 13.06.

Compared to the rest of the industry, the Price/Earnings ratio of FRME is on the same level as its industry peers.

FRME's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.36.

The Price/Forward Earnings ratio is 10.71, which indicates a very decent valuation of FRME.

Compared to the rest of the industry, the Price/Forward Earnings ratio of FRME is on the same level as its industry peers.

When comparing the Price/Forward Earnings ratio of FRME to the average of the S&P500 Index (22.65), we can say FRME is valued rather cheaply.

		Industry Rank	Sector Rank
PE	13.06
Fwd PE	10.71

4.2 Price Multiples

Based on the Price/Free Cash Flow ratio, FRME is valued a bit cheaper than the industry average as 79.20% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	8.72
EV/EBITDA	N/A

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

A more expensive valuation may be justified as FRME's earnings are expected to grow with 14.01% in the coming years.

PEG (NY)0.59

PEG (5Y)N/A

EPS Next 2Y14.01%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

FRME has a Yearly Dividend Yield of 3.17%. Purely for dividend investing, there may be better candidates out there.

FRME's Dividend Yield is a higher than the industry average which is at 3.19.

Compared to an average S&P500 Dividend Yield of 2.27, FRME pays a bit more dividend than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	3.17%

5.2 History

The dividend of FRME is nicely growing with an annual growth rate of 10.21%!

FRME has paid a dividend for at least 10 years, which is a reliable track record.

FRME has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)10.21%

Div Incr Years4

Div Non Decr Years4

5.3 Sustainability

FRME pays out 46.94% of its income as dividend. This is a bit on the high side, but may be sustainable.

The dividend of FRME is growing, but earnings are growing more, so the dividend growth is sustainable.

DP46.94%

EPS Next 2Y14.01%

EPS Next 3YN/A

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FIRST MERCHANTS CORP

NASDAQ:FRME (2/26/2025, 8:00:01 PM)

After market: 42.32 0 (0%)

42.32

-0.66 (-1.54%)

Chartmill FA Rating

GICS SectorFinancials

GICS IndustryGroupBanks

GICS IndustryBanks

Earnings (Last)01-30 2025-01-30/bmo

Earnings (Next)04-23 2025-04-23/bmo

Inst Owners76.44%

Inst Owner Change-23.55%

Ins Owners1.52%

Ins Owner Change-0.19%

Market Cap2.48B

Analysts81.67

Price Target52.02 (22.92%)

Short Float %0.7%

Short Ratio1.65

Dividend

		Industry Rank	Sector Rank
Dividend Yield	3.17%

Yearly Dividend1.38

Dividend Growth(5Y)10.21%

DP46.94%

Div Incr Years4

Div Non Decr Years4

Ex-Date03-07 2025-03-07 (0.35)

Surprises & Revisions

EPS beat(2)1

Avg EPS beat(2)-6.57%

Min EPS beat(2)-16.44%

Max EPS beat(2)3.29%

EPS beat(4)2

Avg EPS beat(4)-3.42%

Min EPS beat(4)-16.44%

Max EPS beat(4)3.29%

EPS beat(8)3

Avg EPS beat(8)-3.04%

EPS beat(12)5

Avg EPS beat(12)-2.32%

EPS beat(16)9

Avg EPS beat(16)1.74%

Revenue beat(2)0

Avg Revenue beat(2)-5.2%

Min Revenue beat(2)-8.07%

Max Revenue beat(2)-2.33%

Revenue beat(4)0

Avg Revenue beat(4)-6.26%

Min Revenue beat(4)-8.07%

Max Revenue beat(4)-2.33%

Revenue beat(8)0

Avg Revenue beat(8)-6.22%

Revenue beat(12)0

Avg Revenue beat(12)-5.7%

Revenue beat(16)2

Avg Revenue beat(16)-4.57%

PT rev (1m)10.87%

PT rev (3m)15.47%

EPS NQ rev (1m)0.19%

EPS NQ rev (3m)0.19%

EPS NY rev (1m)8.98%

EPS NY rev (3m)9.49%

Revenue NQ rev (1m)0.05%

Revenue NQ rev (3m)0.05%

Revenue NY rev (1m)3.62%

Revenue NY rev (3m)3.84%

Valuation

		Industry Rank	Sector Rank
PE	13.06
Fwd PE	10.71
P/S	3.97
P/FCF	8.72
P/OCF	8.72
P/B	1.08
P/tB	1.58
EV/EBITDA	N/A

EPS(TTM)3.24

EY7.66%

EPS(NY)3.95

Fwd EY9.34%

FCF(TTM)4.85

FCFY11.47%

OCF(TTM)4.85

OCFY11.47%

SpS10.67

BVpS39.24

TBVpS26.74

PEG (NY)0.59

PEG (5Y)N/A

Profitability

		Industry Rank	Sector Rank
ROA	0.97%
ROE	7.72%
ROCE	N/A
ROIC	N/A
ROICexc	N/A
ROICexgc	N/A
OM	N/A
PM (TTM)	28.38%
GM	N/A
FCFM	45.5%

ROA(3y)1.18%

ROA(5y)1.18%

ROE(3y)9.79%

ROE(5y)9.61%

ROIC(3y)N/A

ROIC(5y)N/A

ROICexc(3y)N/A

ROICexc(5y)N/A

ROICexgc(3y)N/A

ROICexgc(5y)N/A

ROCE(3y)N/A

ROCE(5y)N/A

ROICexcg growth 3YN/A

ROICexcg growth 5YN/A

ROICexc growth 3YN/A

ROICexc growth 5YN/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3Y-7.92%

PM growth 5Y-3.62%

GM growth 3YN/A

GM growth 5YN/A

F-Score6

Asset Turnover0.03

Health

		Industry Rank	Sector Rank
Debt/Equity	0.11
Debt/FCF	0.87
Debt/EBITDA	N/A
Cap/Depr	N/A
Cap/Sales	N/A
Interest Coverage	N/A
Cash Conversion	N/A
Profit Quality	160.33%
Current Ratio	N/A
Quick Ratio	N/A
Altman-Z	N/A

F-Score6

WACC14.06%

ROIC/WACCN/A

Cap/Depr(3y)N/A

Cap/Depr(5y)N/A

Cap/Sales(3y)N/A

Cap/Sales(5y)N/A

Profit Quality(3y)N/A

Profit Quality(5y)N/A

High Growth Momentum

Growth

EPS 1Y (TTM)-17.14%

EPS 3Y-5.26%

EPS 5Y-0.72%

EPS Q2Q%-12.64%

EPS Next Y21.99%

EPS Next 2Y14.01%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue 1Y (TTM)-0.65%

Revenue growth 3Y7.54%

Revenue growth 5Y7.84%

Sales Q2Q%13.17%

Revenue Next Year6.17%

Revenue Next 2Y5.04%

Revenue Next 3YN/A

Revenue Next 5YN/A

EBIT growth 1YN/A

EBIT growth 3YN/A

EBIT growth 5YN/A

EBIT Next YearN/A

EBIT Next 3YN/A

EBIT Next 5YN/A

FCF growth 1Y-3.77%

FCF growth 3YN/A

FCF growth 5YN/A

OCF growth 1Y-3.77%

OCF growth 3YN/A

OCF growth 5YN/A

FIRST MERCHANTS CORP (FRME) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

More info and screens

5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

More info and screens