CMTV

We rate COMMUNITY BANCORP /VT (CMTV) as a Reduce with a composite score of 49.6/100 at a current price of $30.50. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (71th percentile) and momentum (61th percentile), which together account for the majority of the composite score. Offsetting weakness in value (25th percentile) and investment (26th percentile) tempers our overall conviction. We assign a No Moat rating (30/100), Low uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

COMMUNITY BANCORP /VT holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.6/100 places it at rank #2059 in our full 7,333-stock universe. At N/A in market capitalization, COMMUNITY BANCORP /VT is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 28% and momentum in the 61th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 26th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 83% (+6.9pp vs sector) narrow to operating margins of 17% (-0.4pp vs sector) and net margins of 33.2%, yielding a gross-to-net conversion rate of 40%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $30.50, COMMUNITY BANCORP /VT is trading at a premium to fundamental value. Our value factor score of 25/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 11.6x (roughly in line with the sector median of 11.9x), EV/EBITDA of 13.7x (at a premium), P/B of 1.6x, P/S of 3.9x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to COMMUNITY BANCORP /VT. The company exhibits strong financial stability with a beta of 0.03, and a stability factor in the 71th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: weak quality scores (33th percentile); low beta of 0.03 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 71th percentile and quality factor at the 33th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 83% provide a buffer against cost pressures; above-average stability (71th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate COMMUNITY BANCORP /VT's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 13.8%, and the balance sheet is managed within acceptable parameters (D/E: 83%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; COMMUNITY BANCORP /VT falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, COMMUNITY BANCORP /VT receives a Reduce rating with a composite score of 49.6/100 (rank #2059 of 7,333). Our quantitative framework assigns a No Moat (30/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 43/100.

Our analysis does not support a constructive view on COMMUNITY BANCORP /VT at this time. The combination of limited competitive advantages, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.