Coastal Financial Corporation (NASDAQ:CCB) has a ROIC of 3.50% which is lower than its WACC of 15.87%, indicating inefficiency in generating returns over its cost of capital.
Business First Bancshares, Inc. (NASDAQ:BFST) and Capital Bancorp, Inc. (NASDAQ:CBNK) show lower efficiency in generating returns relative to their cost of capital compared to CCB.
Esquire Financial Holdings, Inc. (NASDAQ:ESQ) demonstrates superior capital efficiency with a ROIC of 16.90% and a WACC of 6.56%, indicating effective utilization of invested capital.
Coastal Financial Corporation (NASDAQ:CCB) is a financial institution that provides a range of banking services. It operates primarily in the United States, offering personal and business banking solutions. The company competes with other financial institutions like Business First Bancshares, Inc. (NASDAQ:BFST), Bank7 Corp. (NASDAQ:BSVN), Capital Bancorp, Inc. (NASDAQ:CBNK), First Western Financial, Inc. (NASDAQ:MYFW), and Esquire Financial Holdings, Inc. (NASDAQ:ESQ).
In evaluating Coastal Financial Corporation’s performance, the Return on Invested Capital (ROIC) is a key metric. CCB’s ROIC is 3.50%, which is lower than its Weighted Average Cost of Capital (WACC) of 15.87%. This results in a ROIC to WACC ratio of 0.22, indicating that the company is not generating returns that exceed its cost of capital.
Comparatively, Business First Bancshares, Inc. (NASDAQ:BFST) has a ROIC of 0.86% and a WACC of 18.29%, leading to a ROIC to WACC ratio of 0.05. This suggests that BFST is less efficient than CCB in generating returns relative to its cost of capital. Similarly, Capital Bancorp, Inc. (NASDAQ:CBNK) has a ROIC of 0% and a WACC of 15.49%, resulting in a ROIC to WACC ratio of 0, indicating no return on invested capital.
On the other hand, Esquire Financial Holdings, Inc. (NASDAQ:ESQ) demonstrates superior capital efficiency with a ROIC of 16.90% and a WACC of 6.56%. This results in a ROIC to WACC ratio of 2.58, the highest among the peers. This indicates that ESQ is effectively utilizing its invested capital to generate significant value for its shareholders, as highlighted by its high ROIC to WACC ratio.
