JMSB

We rate John Marshall Bancorp, Inc. (JMSB) as a Reduce with a composite score of 42.6/100 at a current price of $19.58. 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 (46th percentile) and stability (46th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (31th percentile) and investment (41th percentile) tempers our overall conviction. We assign a No Moat rating (29/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. 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.

John Marshall Bancorp, 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 42.6/100 places it at rank #3164 in our full 7,333-stock universe. At $279M in market capitalization, John Marshall Bancorp, 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.

Revenue is growing at 8%, though momentum at the 46th 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 22% (+5.2pp vs sector) and net margins of 17.4%, 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 $19.58, John Marshall Bancorp, Inc. is trading near fair value based on current fundamentals. Our value factor score of 42/100 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 14.6x (a 22% premium to the sector median of 11.9x), EV/EBITDA of 14.7x (at a premium), P/B of 1.1x, P/S of 2.5x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to John Marshall Bancorp, Inc.. The company exhibits strong financial stability with a beta of 0.71, conservative leverage (31% D/E), and a stability factor in the 46th 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). 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 46th percentile and quality factor at the 31th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our low uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate John Marshall Bancorp, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 7.5%, and the balance sheet is managed within acceptable parameters (D/E: 31%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; John Marshall Bancorp, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.51% 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, John Marshall Bancorp, Inc. receives a Reduce rating with a composite score of 42.6/100 (rank #3164 of 7,333). Our quantitative framework assigns a No Moat (29/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 41/100.

Our analysis does not support a constructive view on John Marshall Bancorp, Inc. 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.