Over the past six months, Peoples Bancorp has been a great trade, beating the S&P 500 by 9.7%. Its stock price has climbed to $41.18, representing a healthy 22.7% increase. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is now the time to buy Peoples Bancorp, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Do We Think Peoples Bancorp Will Underperform?
Despite the momentum, we’re passing on Peoples Bancorp for now. Here are three reasons why there are better opportunities than PEBO, plus one stock we’d rather own.
1. Lackluster Revenue Growth
We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. Peoples Bancorp’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.4% over the last two years was well below its five-year trend. 
Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
2. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Peoples Bancorp’s EPS grew at a weak 1.1% compounded annual growth rate over the last five years, lower than its 17.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
3. Projected TBVPS Growth Is Slim
Tangible book value per share (TBVPS) growth is driven by a bank’s ability to earn more than its cost of capital through lending activities while maintaining a strong balance sheet.
Over the next 12 months, Consensus estimates call for Peoples Bancorp’s TBVPS to grow by 5.5% to $25.42, lousy growth rate.
Final Judgment
Peoples Bancorp falls short of our quality standards. With its shares beating the market recently, the stock trades at 1.2× forward P/B (or $41.18 per share). This valuation tells us a lot of optimism is priced in - you can find more timely opportunities elsewhere. Let us point you toward a dominant aerospace business that has perfected its M&A strategy.
Stocks We Would Buy Instead of Peoples Bancorp
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