CASH Stock Study (5-14-26)

Posted by Mark on May 8, 2026 at 07:41 | Last modified: May 14, 2026 10:16

I recently did a stock study on Pathward Financial Inc. (CASH, $79.93).

M* writes:

     > Pathward Financial Inc is a unitary savings and loan holding company.
     > It’s a wholly owned full-service banking subsidiary of Meta Financial,
     > is both a community-oriented financial institution offering a
     > variety of financial services to meet the needs of the communities
     > it serves, and a payments company providing services on a nationwide
     > basis. It operates through three reportable segments: Consumer: The
     > Consumer segment includes the Partner Solutions business line,
     > which collaborates with partners to navigate payment and lending
     > needs; Commercial: The Commercial segment includes the Commercial
     > Finance business line, which helps businesses access funds needed
     > to launch, operate, and grow; and Corporate Services. The majority
     > of the revenue is generated from Consumer segment.

Over the past decade, this small-size company grows sales and EPS at annualized rates of 16.2% and 23.7%, respectively. Lines are mostly up, straight, and parallel except for revenue dips in ’20 and ’22. Brett Pharr took over as CEO in 2021. Value Line (VL) gives an Earnings Predictability score of 80. Shares outstanding decrease 7.5% (0.9%/year).

Over the past decade, PTPM trails peer and industry averages despite increasing from 26.4% to 33.1% (’25) with a 5-year mean of 33.1%. ROE leads peer and industry averages while increasing from 10.0% to 21.9% (’25) with a 5-year mean of 21.9% [shareholder equity consistently positive and increasing (except for -4.2% YOY in ’23) by 11.8%/year]. Debt-to-Capital is less than peer and industry averages while falling from 78.0% to 4.7% (’25) with a 5-year mean of 11.8%.

Return on Average Assets, the marquee metric I look for in banks, has been over 2.0% since ’21 with a 5-year mean of 2.3%. That is stellar! M* assigns a “Narrow” [quantitative] Economic Moat but only a C grade for Financial Health (per BetterInvesting® website). VL gives a B++ rating for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 1.7% contraction and 6.1% growth for ’26 and ’27 (based on 3 analysts).
• Zacks gives YOY ACE growth of 0.7% and 5.5% for ’26 and ’27, respectively (2 analysts).
• CFRA gives ACE 1.6% YOY contraction and 2.2%/year growth for ’26 and ’25-’27, respectively (3).

My 5.0% annualized forecast is less than the 7.3% realized since Pharr took over.

With regard to EPS growth:

• MarketWatch gives ACE 13.3% YOY and 12.4% per year for ’26 and ’25-’27 (based on 3 analysts).
• Nasdaq.com gives ACE 10.3% YOY for ’27 (2 analysts).
• YF gives YOY ACE 18.3% and 11.5% for ’26 and ’27, respectively (3).
• Zacks gives YOY ACE 10.9% and 10.3% for ’26 and ’27, respectively (2).
• VL reports ACE 10.4% growth from ’25-’27 (1).
• CFRA gives ACE 10.3% YOY and 10.8% per year for ’26 and ’25-’27, respectively (3).

With no long-term analyst projections available, my 9.0% forecast is a haircut to the 14% growth rate realized since Pharr took over. Initial value is ’25 EPS of $7.87/share rather than 2026 Q2 $8.42 (TTM).

My Forecast High P/E is 10.0. Over the past 10 years, high P/E decreases from 16 to 10.9 (’25) with a 5-year mean of 11.3 and a 5-year mean average P/E of 8.7. I am below the 10-year range.

My Forecast Low P/E is 7.0. Over the past 10 years, low P/E ranges from 4.4 in ’21 to 15.4 in ’18 with a last-5-year mean of 6.0. I am [aggressively] forecasting above the latter.

My Low Stock Price Forecast (LSPF) of $55.10 is default based on initial value from above. That is 31.1% less than previous close and 16.4% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) falls from 13.2% to 2.5% (’25) with a last-5-year mean of 3.5%. I am forecasting below the range at 2.0%.

These inputs land CASH in the HOLD zone with a U/D ratio of 1.7. Total Annualized Return (TAR) is 8.9%.

PAR (using Forecast Average—not High—P/E) of 5.4% is less than I seek for a small-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 47 studies done in the past 90 days (13 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 10.0%, 12.0%, 11.3, 6.0, and 3.5%. Only my Forecast Low P/E is higher.

MS high / low EPS are $14.62/ $8.21 versus my $12.11 / $7.87 (per share). My high EPS is less due to a lower growth rate.

MS LSPF of $58.80 implies a Forecast Low P/E of 7.2: greater than the above-stated 6.0. MS LSPF is 19.4% greater than the default $8.21/share * 6.0 = $49.26 that results in more aggressive zoning. MS LSPF also exceeds mine by 6.7%.

MOS is at least moderate in this study because most of my inputs are discounts to what scant data are available (Forecast Low P/E excepted). In support of the MOS is MS TAR exceeding mine by 4.7% per year.

With no other confirmatory long-term data available, I need to build in a MOS rather than assuming future growth will be the same as historical. Relative Value [(current P/E) / 5-year-mean average P/E] is slightly elevated at 1.1. I will set a price alert at the 52-week low then look to re-evaluate at that time.

Per U/D, CASH is a BUY around $71.50/share. Given a forecast high price ~$121, BetterInvesting® TAR criterion would be met [121.1 / ((14.67 / 100 ) +1 ) ^ 5] ~ $61.

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

Categories: BetterInvesting® | Comments (0) | Permalink