Tompkins Financial (TMP) reported first quarter results that included net interest income of US$71.86 million and net income of US$26.07 million, alongside higher earnings per share from continuing operations compared with a year earlier.

The earnings release on 24 April 2026, along with the ongoing buyback program and confirmation of the quarterly dividend, has coincided with an 18.36% year to date share price return and a 45.13% one year total shareholder return. This suggests positive momentum has been building rather than fading.

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With the stock up 45.13% over the past year, trading at US$85.82 and implying only a small gap to the US$88.50 analyst target but a larger 33.98% intrinsic discount, is there still a buying opportunity here, or is the market already pricing in future growth?

Preferred P/E of 7.4x: Is It Justified?

On the numbers provided, Tompkins Financial trades on a P/E of 7.4x, which is slightly above its estimated fair P/E of 7.2x yet well below banking peers.

The P/E ratio compares the current share price of $85.82 to the company’s earnings per share and is a common way investors look at what they are paying for each dollar of profit. For a bank like Tompkins Financial, this is a quick shorthand for how the market is weighing current earnings power against expectations built into the price.

Here, the picture is mixed. The stock screens as expensive relative to its own fair P/E estimate of 7.2x, which suggests the market is paying a small premium to that statistical benchmark. At the same time, it is described as good value against the US Banks industry average P/E of 11.4x and the peer average of 14.4x. These figures imply the market is pricing Tompkins Financial’s earnings at a discount to other banks and similar companies, and that discount could narrow if valuations move closer to the fair ratio level.

Against that backdrop, the stock is also described as trading at 34% below an estimate of its fair value based on future cash flows. This points to a larger gap when looking at the SWS DCF model rather than just earnings multiples. That mix of a slight premium to its internal fair P/E, a discount to sector and peer P/E levels, and a sizable discount to a DCF based fair value gives investors several different valuation angles to weigh.

Result: Price-to-earnings of 7.4x (ABOUT RIGHT)

However, the 7.98% revenue decline and 20.21% net income drop over the past year highlight earnings pressure that could keep the valuation gap in place.

Another View: Cash Flows Paint a Different Picture

While the P/E of 7.4x suggests the stock is roughly in line with its fair ratio, the SWS DCF model points in a different direction. With the share price at $85.82 versus an estimated future cash flow value of $130, the stock screens as undervalued using this second lens.

This gap between an earnings based multiple and a cash flow based estimate raises a simple question for you as an investor: which lens better reflects how Tompkins Financial will actually generate value over time?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tompkins Financial 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 44 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 across earnings, cash flows and recent returns, the next move is up to you. Take a closer look at the 3 key rewards and 1 important warning sign

Looking for more investment ideas?

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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.