SFNC

We rate SIMMONS FIRST NATIONAL CORP (SFNC) as a Reduce with a composite score of 41.5/100 at a current price of $20.41. 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 (53th percentile) and momentum (44th percentile), which together account for the majority of the composite score. Offsetting weakness in value (31th percentile) and quality (35th percentile) tempers our overall conviction. We assign a No Moat rating (31/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: the path to profitability. 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.

SIMMONS FIRST NATIONAL CORP 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 41.5/100 places it at rank #3344 in our full 7,333-stock universe. At $2.8B in market capitalization, SIMMONS FIRST NATIONAL CORP is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -5% combined with momentum at the 44th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

Margin data is not available for SIMMONS FIRST NATIONAL CORP, which limits our assessment of the company's cost structure and operating efficiency. We rely on factor-based signals to infer business quality in the absence of detailed margin data.

At a current price of $20.41, SIMMONS FIRST NATIONAL CORP is trading at a premium to fundamental value. Our value factor score of 31/100 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 P/B of 0.9x, P/S of 2.5x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Medium uncertainty rating to SIMMONS FIRST NATIONAL CORP. The stock presents a balanced risk profile: current negative profitability (net margin -36.1%) and weak quality scores (35th 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: current negative profitability (net margin -36.1%); weak quality scores (35th 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 53th percentile and quality factor at the 35th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (20% D/E) limits balance sheet risk; a 4.42% 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 SIMMONS FIRST NATIONAL CORP's capital allocation as Poor. Key concerns include low returns on equity (-13.4%), negative profitability, weak asset returns (ROA -1.9%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — SIMMONS FIRST NATIONAL CORP significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, SIMMONS FIRST NATIONAL CORP receives a Reduce rating with a composite score of 41.5/100 (rank #3344 of 7,333). Our quantitative framework assigns a No Moat (31/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 40/100.

Our analysis does not support a constructive view on SIMMONS FIRST NATIONAL CORP at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.