Live Oak Bancshares, Inc. (LOB) Fundamental Analysis: Bull vs. Bear Case

LOB

Live Oak Bancshares, Inc.

Fundamental data last updated:August 22, 2026

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company profile

SECTOR

Financial Services

industry

Banks - Regional

Exchange

NYSE

County of HQ

US

Next Earnings Date

Pending Announcement

Business Summary

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.

VALUATION

P/E

13.92 Market Cap ($M USD)

$1.74B

Forward P/E

9.22 PEG

0.18 PRICE TO SALES

1.63 PRICE TO BOOK

1.35 EV / EBITDA

4.99 5-Year Average P/E

Free Cash Flow Yield

7.25%

DCF Value

$40.56

Graham Number

$41.14

Price to FCF

13.80 EV to FCF

8.12 Earnings Yield

7.19%

FCF Yield

7.25%

DIVIDEND

Yield

0.32%

Annual Payout

$0.12

Payout Ratio

8.58%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$2.70

Next Year EPS Growth Estimate

$4.08

Next Year Revenue Growth Estimate

$745.17M

Return on Equity (ROE)

10.37%

FREE CASH FLOW

Operating Margin

17.65%

Debt-to-Equity

0.08 Piotroski F-Score

6 Altman Z-Score

-0.75

Return on Invested Capital (ROIC)

12.83%

Current Ratio

0.07 Quick Ratio

0.07 Net Debt to EBITDA

-3.49

Interest Coverage

0.41 Gross Profit margin

50.11%

FCF PER SHARE

$2.75

REVENUE PER SHARE

$23.20

Gainseekers Quantitative Analysis

Summary

The market seems to be undervaluing Live Oak Bancshares, Inc. relative to its intrinsic worth. With a DCF Value above the recent pricing, there’s a clear disconnect. The Forward P/E of 9.08 suggests a bargain, especially when paired with a robust Earnings Yield of 7.17%. However, the Altman Z-score of 0.33 raises red flags about financial distress. Despite these concerns, the stock’s valuation metrics indicate potential upside if the company can navigate its risks effectively.

AI Exposure / Tech Reliance

In the rapidly evolving financial services sector, Live Oak Bancshares is positioned to leverage AI and tech advancements. As a regional bank, its adaptability to digital banking trends is crucial. The industry’s shift towards tech-driven solutions could bolster its operational efficiency and customer engagement.

The Bull Case

For the discerning GARP investor, Live Oak Bancshares offers compelling reasons to buy. The company boasts a strong ROIC of 1.23%, indicating efficient capital use. Its FCF Yield, though modest, complements a solid Piotroski F-Score of 5, suggesting decent financial health. With an operating margin of 17.65%, the bank demonstrates pricing power and operational efficiency, making it an attractive prospect for value seekers.

The Bear Case

Despite some strengths, Live Oak Bancshares faces significant structural risks. The Altman Z-score signals potential financial instability, and the Price to FCF ratio of 32.88 suggests the stock may be overvalued on a cash flow basis. Additionally, the stock's proximity to its 52-week high could indicate technical overextension. These factors, combined with a low interest coverage ratio, paint a picture of vulnerability that cannot be ignored.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$41.00

Institutional Ownership %

1-Year Beta

1.92 Insider Buying % (6 Mo)

Distance to 52-Week High

14.01%

Distance to 52-Week Low

28.84%

EARNINGS SURPRISE %

11.11%

50-DAY SMA

$35.78

200-DAY SMA

$35.67

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.