• If you are wondering whether Hilltop Holdings is still fairly priced after its recent run, starting with a clear look at the value of the stock can help you frame your next move.
• The shares last closed at US$39.67, with returns of 2.7% over 7 days, 13.5% over 30 days, 17.0% year to date, 24.7% over 1 year, 25.6% over 3 years and 37.7% over 5 years. This provides plenty of price history for a valuation check.
• Recent attention on the stock has been supported by ongoing coverage as part of broader evergreen interest in Hilltop Holdings, keeping the company on the radar for investors who follow US regional banks. That context makes it a useful moment to step back and assess whether the current share price lines up with its underlying value.
• On our checklist of six valuation tests, Hilltop Holdings currently scores 0 out of 6. In the next sections we will walk through different valuation approaches, then finish with a way to think about value that goes beyond the usual ratios and models.

Hilltop Holdings scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Hilltop Holdings Excess Returns Analysis

The Excess Returns model looks at how much value a company can create above the return that equity investors require. It compares the earnings the business is expected to generate on its equity base with the cost of that equity, then uses those excess returns to estimate what the shares might be worth today.

For Hilltop Holdings, the model uses a Book Value of US$36.42 per share and a Stable EPS of US$2.35 per share, based on weighted future Return on Equity estimates from four analysts. The Average Return on Equity is 6.06%, while the Cost of Equity is US$3.04 per share. That leads to an Excess Return of US$0.69 per share, which suggests the expected return from the business is below the required return assumed in this model. The Stable Book Value input is US$38.77 per share, again based on analyst estimates.

Bringing these pieces together, the Excess Returns model arrives at an intrinsic value estimate of about US$23.19 per share. Compared with the recent share price of US$39.67, this implies the stock is around 71.1% overvalued on this method.

Result: OVERVALUED

Our Excess Returns analysis suggests Hilltop Holdings may be overvalued by 71.1%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Hilltop Holdings Price vs Earnings

For a profitable business like Hilltop Holdings, the P/E ratio is a straightforward way to gauge what you are paying for each dollar of earnings. It connects the share price directly to current profits, which makes it a familiar starting point if you are comparing this bank with other listed banks.

What counts as a reasonable P/E depends on what investors expect from the company and how risky they think it is. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth expectations or higher risk usually line up with a lower multiple.

Hilltop Holdings currently trades on a P/E of 14.26x. That sits above the Banks industry average of 11.95x and is also slightly above the peer group average of 13.92x. Simply Wall St’s Fair Ratio for Hilltop Holdings is 9.10x, which is a proprietary estimate of the P/E you might expect given factors such as its earnings profile, industry, profit margins, market cap and risk characteristics. Because the Fair Ratio blends these company specific factors rather than relying only on peer or industry comparisons, it can give a more tailored view of value. On this measure, the current 14.26x P/E is higher than the 9.10x Fair Ratio, which points to the shares looking overvalued on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Hilltop Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are short, clear stories you build around Hilltop Holdings. These link your view of its business, your assumptions for future revenue, earnings and margins, and the fair value you think is reasonable. All of this is contained within an easy tool on Simply Wall St’s Community page that updates as new news or earnings arrive and lets you compare that fair value with the current price. One investor might lean toward the higher recent fair value estimate of about US$38.67 if they think capital returns and margins stay resilient. Another might focus on risks around Texas exposure or mortgage headwinds and prefer a lower value. These different Hilltop Holdings Narratives give each investor a practical way to decide if today’s price feels high, low or close to their own number.

Do you think there's more to the story for Hilltop Holdings? Head over to our Community to see what others are saying!

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.