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3 Reasons GBCI is Risky and 1 Stock to Buy Instead

GBCI Cover Image

Over the past six months, Glacier Bancorp’s shares (currently trading at $42.82) have posted a disappointing 14.6% loss, well below the S&P 500’s 4.5% gain. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Is now the time to buy Glacier Bancorp, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is Glacier Bancorp Not Exciting?

Even with the cheaper entry price, we're cautious about Glacier Bancorp. Here are three reasons why there are better opportunities than GBCI and a stock we'd rather own.

1. Revenue Tumbling Downwards

Long-term growth is the most important, but within financials, a stretched historical view may miss recent interest rate changes and market returns. Glacier Bancorp’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2.5% over the last two years. Glacier Bancorp Year-On-Year Revenue GrowthNote: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

2. Net Interest Income Points to Soft Demand

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

Glacier Bancorp’s net interest income has grown at a 4% annualized rate over the last four years, worse than the broader bank industry.

Glacier Bancorp Quarterly Net Interest Income

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for Glacier Bancorp, its EPS declined by 4.5% annually over the last five years while its revenue grew by 5.5%. This tells us the company became less profitable on a per-share basis as it expanded.

Glacier Bancorp Trailing 12-Month EPS (Non-GAAP)

Final Judgment

Glacier Bancorp isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 1.4× forward P/B (or $42.82 per share). At this valuation, there’s a lot of good news priced in - we think there are better stocks to buy right now. We’d recommend looking at the most entrenched endpoint security platform on the market.

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