Happen Bank has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 14.5% to $16.70 per share while the index has gained 12.7%.
Is now a good time to buy HAPN? Find out in our full research report, it’s free.
Why Is Happen Bank a Good Business?
Pioneering peer-to-peer lending in the US before evolving into a digital bank, Happen Bank (NASDAQ: HAPN) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
1. Skyrocketing Revenue Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
Thankfully, Happen Bank’s 18.1% annualized revenue growth over the last five years was excellent. Its growth beat the average financials company and shows its offerings resonate with customers.
Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Happen Bank’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
3. Previous Growth Initiatives Are Paying Off
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for financial firms. Over a long period, financial firms with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, Happen Bank has averaged an ROE of 12%, respectable for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Happen Bank has a narrow competitive moat.
Final Judgment
These are just a few reasons why Happen Bank is one of the best financials companies out there. At $16.70 per share (or 8.7× forward P/E), is now the right time to buy the stock? See for yourself in our full research report, it’s free.
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