NSTS Bancorp, Inc. (NASDAQ: NSTS)

Sector: Financial Services Industry: Banks - Regional CIK: 0001881592
Market Cap 57.98 Mn
P/B 0.73
P/E -102.25
P/S 5.94
ROIC (Qtr) -0.72
Div Yield % 0.00
Rev 1y % (Qtr) 14.64
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00

About

NSTS Bancorp, Inc., a Delaware corporation founded in September 2021, is a savings and loan holding company overseen by the Federal Reserve Board. Its primary business activity involves attracting deposits from the general public and utilizing these funds to originate one- to four-family residential mortgage loans and acquire investments. As of December 31, 2023, the company's net loan portfolio totaled $120.6 million, primarily comprised of one- to four-family residential mortgage loans. The company's lending activities are contingent on underwriting...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 9.97M exceeds capital expenditure of 231000 by 43.16x, indicating strong organic growth funding capability.
  • Operating cash flow of 10.20M provides strong 5.60x coverage of operating expenses 1.82M, showing operational efficiency.
  • Retained earnings of 39.74M represent substantial 0.50x of equity 78.94M, indicating strong internal capital generation.
  • Operating cash flow of 10.20M provides strong 44.16x coverage of capital expenditure 231000, enabling organic growth.
  • Strong free cash flow of 9.97M provides 1.17x coverage of SG&A expenses 8.51M, indicating efficient cost management.

Bear case

  • Operating cash flow of 10.20M barely covers its investment activities of (11.63M), with a coverage ratio of -0.88, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of (567000) show weak coverage of depreciation charges of 301000, with a -1.88 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 9.97M represents just -1.99x of debt issuance (5M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 10.20M is outpaced by equity issuance of (570000) (-17.89 ratio), indicating concerning reliance on equity markets for funding operations.
  • Retained earnings of 39.74M provide limited buffer against comprehensive income items of (6.22M), which is -6.39x, 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 0.04 0.14
EV to Cash from Ops. EV/CFO 1.03 7.21
EV to Debt EV to Debt 0.00 5.20
EV to EBIT EV/EBIT -18.50 14.98
EV to EBITDA EV/EBITDA -39.43 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 1.05 8.87
EV to Market Cap EV to Market Cap 0.18 1.04
EV to Revenue EV/Rev 1.07 -3.76
Price to Book Value [P/B] P/B 0.73 1.17
Price to Earnings [P/E] P/E -102.25 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 35.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 62.80 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -1.32 15.78
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 87.43 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 91.48 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 83.40 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 83.40 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 86.67 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 2,181.21 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 57.78 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) 0.00 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) 0.00 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) -2.70 147.97
EBIT Margin % EBIT Margin % (Qtr) -5.81 155.41
EBT Margin % EBT Margin % (Qtr) -5.81 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) -5.80 115.63