FNLC

We rate First Bancorp, Inc /ME/ (FNLC) as a Hold with a composite score of 50.0/100 at a current price of $27.80. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (71th percentile) and momentum (56th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (31th percentile) and investment (42th percentile) tempers our overall conviction. We assign a Narrow Moat rating (42/100), Low uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate. 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.

First Bancorp, Inc /ME/ 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 50.0/100 places it at rank #2006 in our full 7,333-stock universe. At $290M in market capitalization, First Bancorp, Inc /ME/ 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.

Revenue is growing at 113%, though momentum at the 56th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 0% (-76.5pp vs sector) narrow to operating margins of 24% (+7.4pp vs sector) and net margins of 20.1%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $27.80, First Bancorp, Inc /ME/ is trading near fair value based on current fundamentals. Our value factor score of 50/100 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. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 10.2x (roughly in line with the sector median of 11.9x), EV/EBITDA of 10.8x (at a premium), P/B of 1.2x, P/S of 2.0x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to First Bancorp, Inc /ME/. The company exhibits strong financial stability with a beta of 0.46, conservative leverage (35% D/E), 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 (31th percentile); low beta of 0.46 — 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 31th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (71th percentile) suggests predictable business dynamics; a 5.60% dividend yield anchors total return. 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 First Bancorp, Inc /ME/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 11.6%, and the balance sheet is managed within acceptable parameters (D/E: 35%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; First Bancorp, Inc /ME/ falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 5.60% dividend yield provides some income return, but 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, First Bancorp, Inc /ME/ receives a Hold rating with a composite score of 50.0/100 (rank #2006 of 7,333). Our quantitative framework assigns a Narrow Moat (42/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis supports a neutral stance on First Bancorp, Inc /ME/. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.