HBT

We rate HBT Financial, Inc. (HBT) as a Reduce with a composite score of 48.6/100 at a current price of $27.22. 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 momentum (66th percentile) and stability (61th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (31th percentile) and quality (34th percentile) tempers our overall conviction. We assign a Narrow Moat rating (50/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress. 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.

HBT Financial, Inc. 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 48.6/100 places it at rank #2234 in our full 7,333-stock universe. At $794M in market capitalization, HBT Financial, Inc. 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 outlook is moderately positive, with revenue expanding at 2% and favorable momentum (66th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

The margin cascade tells an important story: gross margins of 0% (-76.5pp vs sector) narrow to operating margins of 40% (+23.3pp vs sector) and net margins of 29.8%, 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 $27.22, HBT Financial, Inc. is trading near fair value based on current fundamentals. Our value factor score of 56/100 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 11.7x (roughly in line with the sector median of 11.9x), EV/EBITDA of 8.7x (near the sector median), P/B of 1.5x, P/S of 3.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to HBT Financial, Inc.. The stock presents a balanced risk profile: significant leverage (740% debt-to-equity) and weak quality scores (34th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (740% debt-to-equity); weak quality scores (34th percentile); low beta of 0.65 — 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 61th percentile and quality factor at the 34th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (61th percentile) suggests predictable business dynamics; a 3.25% 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 HBT Financial, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 12.7%, and the balance sheet is managed within acceptable parameters (D/E: 740%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; HBT Financial, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 3.25% 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, HBT Financial, Inc. receives a Reduce rating with a composite score of 48.6/100 (rank #2234 of 7,333). Our quantitative framework assigns a Narrow Moat (50/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis does not support a constructive view on HBT Financial, Inc. at this time. The combination of the current quantitative profile, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.