First Mid Bancshares

First Mid Bancshares Inc earns a 3-star quantitative star rating, reflecting our opinion that this share class is a balanced choice, but prudent investors should consider looking elsewhere. The stock currently trades at a 4% discount to our quantitative fair value estimate of $51.82 per share; however, caution is warranted due to this estimate's high uncertainty rating.

The company's valuation metrics increase our estimated fair value. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. Reflecting the firm's valuation is its book value yield of 82.9%, which ranks in the top 40% compared with global peers. The market price is low relative to the book (accounting) value of the company's equity, which contributes to our view that shares are cheap.

Alternatively, the firm's liquidity is potentially concerning. Low liquidity can inhibit a company from meeting short-term obligations, potentially reducing financial stability and increasing distress risk. The firm's median trading volume over the past 60 days, a core component of liquidity, sits in the bottom 45% globally. Relatively low trading volume for these shares could lead to prices that don't accurately reflect the intrinsic value of shares. Despite our favorable price/fair value ratio, this characteristic is a negative attribute.

In addition to the aforementioned drivers, our model considers momentum as part of its comprehensive analysis. This share class has outperformed the broader universe over the past year. While we believe the stock is undervalued, this outperformance had a negative impact on our valuation estimate.

With its quantitative economic moat rating of none, we do not expect this company to materially outearn its cost of capital in the long run. However, its financial health score is strong, suggesting that the company should be well positioned to weather tough times.