Investment Thesis
S&T Bancorp exhibits concerning operational efficiency despite 47.5% revenue growth, with an unsustainable interest coverage ratio of 0.5x indicating the company cannot cover interest expenses from operating income. Critically low returns on equity (2.5%) and assets (0.4%), combined with flat net income growth, signal deepening profitability challenges and inefficient capital deployment that pose material solvency risk.
Strengths
- Strong revenue growth of 47.5% YoY demonstrates market demand and scale expansion
- Healthy balance sheet with low leverage (0.08x debt-to-equity) provides buffer for operational challenges
- Solid free cash flow generation of $41.6M with 32.9% FCF margin provides liquidity cushion
Risks
- Critical interest coverage ratio of 0.5x indicates inability to service debt from operating earnings—fundamentally unsustainable
- Extremely depressed returns: ROE of 2.5% and ROA of 0.4% show severe capital inefficiency and shareholder value destruction
- Net income flat at 0.0% YoY growth despite 47.5% revenue surge signals margin compression and operational deterioration
Key Metrics to Watch
- Interest coverage ratio trend—must improve above 1.5x to indicate operational viability
- Net income growth and margin trends—critical to identify if profitability decline stabilizes
- Return on equity progression—must show meaningful improvement toward 8-10% range for banking sector health
Financial Metrics
Revenue
126.3M
Net Income
35.1M
EPS (Diluted)
$0.94
Free Cash Flow
41.6M
Total Assets
9.9B
Cash
339.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
34.9%
Net Margin
27.8%
ROE
2.5%
ROA
0.4%
FCF Margin
32.9%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.08x
Debt/Assets
85.6%
Interest Coverage
0.49x
Long-term Debt
113.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T06:56:16.845484 |
Data as of: 2026-03-31 |
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