Community West Bancshares (NASDAQ: CWBC)

Sector: Financial Services Industry: Banks - Regional CIK: 0001127371
Market Cap 419.38 Mn
P/B 1.05
P/E 12.37
P/S 3.03
ROIC (Qtr) 6.64
Div Yield % 3.20
Rev 1y % (Qtr) 16.98
Total Debt (Qtr) 90.00 Mn
Debt/Equity (Qtr) 0.23

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 36.73M provides robust 0.41x coverage of total debt 90M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 36.73M provides strong 32.41x coverage of stock compensation 1.13M, indicating sustainable incentive practices.
  • Robust free cash flow of 33.52M exceeds capital expenditure of 3.20M by 10.46x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 3.51B provides 38.97x coverage of total debt 90M, indicating robust asset backing and low credit risk.
  • Retained earnings of 230.12M represent substantial 0.58x of equity 397.58M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 36.73M barely covers its investment activities of (92.21M), with a coverage ratio of -0.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 36.73M provides thin coverage of dividend payments of (9.14M) with a -4.02 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 121.56M provide limited coverage of acquisition spending of (2000), which is -60779x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 33.52M represents just -0.29x of debt issuance (115M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 230.12M provide limited buffer against comprehensive income items of (42.21M), which is -5.45x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.12 0.14
EV to Cash from Ops. EV/CFO 12.01 7.21
EV to Debt EV to Debt 4.90 5.20
EV to EBIT EV/EBIT 9.36 14.98
EV to EBITDA EV/EBITDA 8.61 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 13.15 8.87
EV to Market Cap EV to Market Cap 1.05 1.04
EV to Revenue EV/Rev 3.19 -3.76
Price to Book Value [P/B] P/B 1.05 1.17
Price to Earnings [P/E] P/E 12.37 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.71 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 26.40 35.28
Dividend per Basic Share Div per Share (Qtr) 0.60 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 34.05 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 58.90 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -18.42 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 66.67 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 408.52 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 772.90 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 436.54 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 436.54 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 175.76 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 152.11 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 45.28 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.23 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 37.00 147.97
EBIT Margin % EBIT Margin % (Qtr) 34.08 155.41
EBT Margin % EBT Margin % (Qtr) 34.08 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 24.50 115.63