Why Preferred Bank Stock Is Back on Investor Radar

Preferred Bank (PFBC) has attracted fresh attention after quarterly earnings came in ahead of consensus expectations, paired with increased institutional interest, including a larger position from the New York State Common Retirement Fund.

Despite the recent earnings beat and higher institutional ownership, Preferred Bank’s 1-month share price return of a 4.61% decline and year-to-date share price return of a 5.24% decline suggest momentum has cooled. At the same time, 1-year and 5-year total shareholder returns of 4.73% and 100.45% indicate that investors who stayed the course have still been rewarded over time.

If this bank’s mixed momentum has you thinking about where else value might be hiding, it could be worth scanning our 23 top founder-led companies as a next step.

With earnings ahead of expectations, a forward P/B of 1.3x and an estimated intrinsic value gap of around 64%, along with mixed recent returns, is Preferred Bank quietly undervalued here, or is the market already pricing in its future growth?

Most Popular Narrative: 15% Undervalued

The most followed narrative pegs Preferred Bank’s fair value at $107, compared with a last close of $90.91, and ties that gap to specific growth, margin, and capital return assumptions.

Expansion into new high-growth markets, especially with new branches in Manhattan and Silicon Valley, positions Preferred Bank to capture a growing client base and increase loan originations, likely driving above-peer revenue growth.

Continued demographic growth and rising wealth in the Asian-American community, Preferred Bank's core client segment, supports sustained demand for commercial lending and banking services, leading to a larger and more profitable revenue base.

Curious how this story translates into numbers? Revenue assumptions, margin compression, and shrinking share count all feed into that $107 figure. The full narrative connects those moving parts.

Result: Fair Value of $107 (UNDERVALUED)

However, concentrated exposure to California commercial lending and slower digital adoption could put pressure on growth assumptions and margins if local conditions or customer preferences shift.

Build Your Own Preferred Bank Narrative

If you are not fully aligned with this view or prefer to weigh the figures yourself, you can shape a custom thesis in minutes with Do it your way.

A great starting point for your Preferred Bank research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Ready for your next investing idea?

Preferred Bank might be on your radar now, but you do not want your research to stop here. Use the Simply Wall St screener to spot your next move before everyone else.

• Target dependable income and focus on higher-yield names by scanning our 13 dividend fortresses that could suit an income focused portfolio.
• Hunt for quality at a reasonable price and see which companies our 53 high quality undervalued stocks highlights as potential ideas to research next.
• Prioritise resilience and stress test your watchlist against our 85 resilient stocks with low risk scores to see which companies may offer a steadier ride.

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.