Renasant Corp. – Value Analysis (NASDAQ:RNST) : December 20, 2017

Capitalcube gives Renasant Corp. a score of 64.

Our analysis is based on comparing Renasant Corp. with the following peers – First Horizon National Corporation, Pinnacle Financial Partners, Inc., BancorpSouth Bank, Trustmark Corporation, Cullen/Frost Bankers, Inc., First Bancshares, Inc., VIVUS, Inc., Peoples Financial Corporation, Hancock Holding Company and Citizens Holding Company (FHN-US, PNFP-US, BXS-US, TRMK-US, CFR-US, FBMS-US, VVUS-US, PFBX-US, HBHC-US and CIZN-US).

Fundamental Overview

Renasant Corp. has a fundamental score of 64 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.38 is about median in its peer group.
  • The market expects RNST-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • RNST-US‘s relative capital efficiency and net profit margins are both around the median level.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • RNST-US‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • While RNST-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company is likely overinvesting in a business with only median returns.

Drivers of Margin

  • Margins do not suggest any relative benefit from a pricing or an operating cost advantage.
  • The company’s net interest income (net interest income/total revenues) of 70.65% is around peer median suggesting that RNST-US‘s lending operations does not benefit from any differentiating pricing advantage. In addition, RNST-US‘s pre-tax margin of 32.55% is also around the peer median suggesting no operating cost advantage relative to peers.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 29.35% is around peer median. In addition, RNST-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 62.97x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Renasant Corp. is a bank holding company, which engages in the provision of financial, fiduciary, and insurance services through its the Renasant Bank. It operates through the following segments: Community Banks, Insurance, Wealth Management, and Other. The Community Banks segment delivers banking and financial services to individuals and small to medium sized businesses including checking and savings accounts, business and personal loans, equipment leasing, as well as safe deposit, and night depository facilities. The Insurance segment includes full service insurance agency offering lines of commercial and personal insurance. The Wealth Management segment provides fiduciary services which includes the administration and management of trust accounts including personal and corporate benefit accounts, self directed individual retirement arrangements, and custodial accounts. The Other segment comprises of the operations of the holding company and other eliminations. The company was founded in 1982 and is headquartered in Tupelo, MS.