Revenue Beat Puts First Bancorp (FBNC) Earnings in Focus

First Bancorp (FBNC) recently reported quarterly revenue of $127.8 million, reflecting 30.9% year on year growth and coming in 1.4% above analyst expectations. This result has helped draw fresh attention to the stock.

The report also included a narrow beat on net interest income estimates and a slight miss on tangible book value per share. Since the release, First Bancorp's share price has risen 4.2% to $65.21 as of the latest close.

Beyond the latest quarter, First Bancorp’s share price return of 30.3% year to date and 15.6% over 90 days suggests momentum has been building, while the 1 year total shareholder return of 29.2% aligns with that trend.

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Bulls view First Bancorp’s revenue beat and recent share price strength as validation, while bears point to the slight tangible book miss and valuation risk after the run. Which side do the current pricing and fundamentals support?

Price-to-Earnings of 20.7x: Is it justified?

On the latest figures, First Bancorp trades on a P/E of 20.7x, which prices the stock above the broader US Banks industry and close to recent highs. For readers tracking valuation, this sits against a share price of $66.34 at the last close.

The P/E ratio compares what investors are paying for each dollar of current earnings. For a bank like First Bancorp, it reflects what the market is willing to pay today for the company’s profit stream, including its lending income, fee businesses and other banking services.

At 20.7x earnings, First Bancorp sits well above the US Banks industry average of 12.1x. This implies investors are currently paying a premium for its earnings relative to sector peers. That premium also stands above the estimated fair P/E of 17x. This suggests there is room for the multiple to move closer to that level if sentiment or expectations change.

Result: Price-to-Earnings of 20.7x (OVERVALUED)

However, investors still need to weigh risks such as a potential reset in valuation multiples or weaker credit trends that could challenge the current premium of First Bancorp.

Another View on First Bancorp’s Valuation

The earlier discussion framed First Bancorp as expensive on a 20.7x P/E compared with the US Banks industry average of 12.1x and a fair ratio of 17x. Our DCF model points in a different direction. On this view, the stock price of $66.34 sits about 29.5% below an estimated fair value of $94.12, which suggests an undervalued setup instead of a premium story.

For readers weighing both signals, the question is simple: Which measure better captures the risks and rewards you care about most in First Bancorp right now, the P/E premium or the DCF discount?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out First Bancorp for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals around valuation and sentiment on First Bancorp, it makes sense to review the details yourself and decide where you stand. To weigh both the concerns and the potential upside in a structured way, start by looking at the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.