Value
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 6.5 |
| Fwd P/E | 8.7 |
| PEG | 5.4 |
- ▸Forward P/E: 13.0x
- ▸PEG: 1.40
- ▸Attractively valued
WABC · Why this verdict
Why Westamerica Bancorporation (WABC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Westamerica Bancorporation has produced a perfect 4-for-4 earnings beat streak with consistent EPS surprises near 5%, and trades at a forward P/E of 13.4x with best-in-class net margins of 44%, though revenue is declining at -7% annually and the stock sits near its 52-week high with negative asymmetry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue has declined by 7% year-over-year, which is a significant negative for a regional bank where top-line growth is necessary to absorb operating costs and fund loan growth; this creates a structural headwind to sustaining the current earnings level. Growth breakdown | Revenue growth turns positive on a year-over-year basis in at least 2 of the next 4 quarters. | →Stable |
| CounterThe bank may be managing intentional balance sheet contraction as a risk management strategy; revenue decline paired with margin expansion can sometimes reflect deliberate quality improvement. | ||
Westamerica has beaten EPS estimates in all 4 of the last 4 quarters, with each quarter delivering approximately $1.12 in actual earnings versus consensus estimates near $1.07, reflecting a remarkably consistent quarterly delivery that is rare for a community bank. Earnings | The beat streak extends to at least 6 consecutive quarters with average EPS surprise remaining above 3%. | ↓Deteriorating |
| CounterSteady beats at a small community bank often reflect conservative guidance discipline rather than earnings power; if interest rate conditions shift unfavorably, even modest guidance may become unreachable. | ||
Westamerica's net margin of 44% ranks best in class among regional bank peers, reflecting an extremely efficient operating model for a bank of its size, which supports the quality of its earnings even as revenue contracts. Quality breakdown | Net margin remains above 35% on a trailing 12-month basis over the next 12 months. | →Stable |
| CounterThe high net margin exists partly because of the bank's asset-sensitive balance sheet that benefited from rising rates; as rates normalize or decline, margin compression could rapidly erode this advantage. | ||
The stock has formed a golden cross and trades within 2.3% of its 52-week high on strong momentum indicators including a rising on-balance-volume and a bullish MACD, but the reward-to-risk ratio is only 0.07 at current prices. Momentum breakdown | The stock clears its 52-week high and sustains price above $60 for at least 30 days, or a pullback creates a better entry with reward-to-risk above 1.5. | ↓Deteriorating |
| CounterStocks sitting at 52-week highs with negative asymmetry often consolidate or pull back as sellers take profits near the resistance level. | ||
Revenue has declined by 7% year-over-year, which is a significant negative for a regional bank where top-line growth is necessary to absorb operating costs and fund loan growth; this creates a structural headwind to sustaining the current earnings level.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive on a year-over-year basis in at least 2 of the next 4 quarters.
CounterThe bank may be managing intentional balance sheet contraction as a risk management strategy; revenue decline paired with margin expansion can sometimes reflect deliberate quality improvement.
Westamerica has beaten EPS estimates in all 4 of the last 4 quarters, with each quarter delivering approximately $1.12 in actual earnings versus consensus estimates near $1.07, reflecting a remarkably consistent quarterly delivery that is rare for a community bank.
↓DeterioratingEarnings
- Expectation
- The beat streak extends to at least 6 consecutive quarters with average EPS surprise remaining above 3%.
CounterSteady beats at a small community bank often reflect conservative guidance discipline rather than earnings power; if interest rate conditions shift unfavorably, even modest guidance may become unreachable.
Westamerica's net margin of 44% ranks best in class among regional bank peers, reflecting an extremely efficient operating model for a bank of its size, which supports the quality of its earnings even as revenue contracts.
→StableQuality breakdown
- Expectation
- Net margin remains above 35% on a trailing 12-month basis over the next 12 months.
CounterThe high net margin exists partly because of the bank's asset-sensitive balance sheet that benefited from rising rates; as rates normalize or decline, margin compression could rapidly erode this advantage.
The stock has formed a golden cross and trades within 2.3% of its 52-week high on strong momentum indicators including a rising on-balance-volume and a bullish MACD, but the reward-to-risk ratio is only 0.07 at current prices.
↓DeterioratingMomentum breakdown
- Expectation
- The stock clears its 52-week high and sustains price above $60 for at least 30 days, or a pullback creates a better entry with reward-to-risk above 1.5.
CounterStocks sitting at 52-week highs with negative asymmetry often consolidate or pull back as sellers take profits near the resistance level.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.3 |
| ROA | 1.3 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 4.8 |
| Piotroski F | 7.8 |
- ▸Strong margins: 44%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.6 |
| EPS growth | 3.9 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 9.5 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 5.0 |
| Price target | 6.0 |
Insider
5.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.4 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 8.0 |
| growth rank | 1.3 |
- ▸Best-in-class margins
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 3.6 |
| 52w position | 9.3 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 7.2 |
| volatility | 7.3 |
| put call | 0.0 |
| implied vol | 5.0 |
| beta | 9.7 |
| news risk | 6.0 |
- ▸Elevated put/call: 8.00
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.3 |
| dividend safety | 4.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 3.1%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.6=NEGATIVE
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-1.61
Upside
-9.3%
Downside
5.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 57, MACD bullish
EdgeInst Constrain — Small cap ($1.4B) below institutional reach
SuitabilityAggressive — MCap $1.4B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.2>=4.5. Top dim: Value at 7.2; weakest: Growth at 3.2. No conviction either direction.
The strongest dimensions are Value at 7.2, Risk (lower is worse) at 6.0, and Sentiment at 5.8; the weakest are Growth at 3.2, Peer rank at 4.0, and Momentum at 5.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Consistency
Trip ifEPS falls below $1.00 in at least 1 of the next 4 quarters, breaking the consistent delivery pattern.
- P2Best In Class Net Margin
Trip ifNet margin falls below 35%, indicating more than a 9-point compression from the current 44%.
- P3Revenue Decline Growth Concern
Trip ifRevenue declines by more than 10% year-over-year in 2 or more of the next 4 quarters.
- P4Breakout Near 52 Week High
Trip ifPrice drops below $52, more than 10% below the current $57.64, signaling the breakout has failed.