Mendon Capital Advisors just disclosed a fresh stake in Simmons First National (SFNC), picking up more than 400,000 shares. This represents a clear vote of confidence from a specialist in U.S. regional banks.

The Mendon move lands just as sentiment is starting to turn, with the share price at $19.65 and a 1 month share price return of 8.56 percent helping to offset a weak year to date share price return and a negative 1 year total shareholder return. This suggests short term momentum is improving even though the longer term picture still needs rebuilding.

If this kind of institutional interest has you thinking more broadly about where capital is flowing, it is a good time to explore fast growing stocks with high insider ownership.

But with Simmons First National trading below analyst targets and our estimates of intrinsic value, yet still nursing weak recent returns, is this a mispriced regional bank turnaround, or is the market already baking in the recovery?

Most Popular Narrative Narrative: 13.8% Undervalued

With Simmons First National last closing at $19.65 versus a most popular fair value of $22.80, this narrative frames a modestly mispriced recovery story.

The analysts are assuming Simmons First National's revenue will grow by 19.7% annually over the next 3 years.

If Simmons First National's profit margin were to converge on the industry average, you could expect earnings to reach $354.8 million (and earnings per share of $2.0) by about September 2028, up from $160.2 million today. The analysts are largely in agreement about this estimate.

Want to see the math behind this banking rerating case? The narrative leans on aggressive revenue expansion, rising margins, and a slimmer future earnings multiple. Curious which assumptions really carry the valuation load?

Result: Fair Value of $22.80 (UNDERVALUED)

However, sustained competitive pressure on loan pricing, or renewed stress in commercial real estate, could easily derail the margin expansion and earnings ramp the narrative assumes.

Build Your Own Simmons First National Narrative

If you see the story differently or want to stress test the assumptions with your own inputs, you can build a custom view in just minutes: Do it your way.

A great starting point for your Simmons First National research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.