Capital Bancorp (NASDAQ:CBNK) Sees Unusually-High Trading Volume - Still a Buy?

On Friday, shares of Capital Bancorp, Inc. (NASDAQ:CBNK) experienced a noticeable increase in trading volume. During mid-day trading, 25,049 shares were exchanged, marking an 8% decline from the previous session, which had seen 27,275 shares traded. At that time, the stock was trading at $30.22, down from a prior close of $30.62.

Wall Street Analyst Insights

Analyst Target Price Increase

In a recent research note, Keefe, Bruyette & Woods revised their target price for Capital Bancorp's shares from $28.00 to $32.00. They maintained a "market perform" rating, indicating a measured outlook for the company's stock.

Capital Bancorp's Recent Performance

Key Financial Ratios

Capital Bancorp has a quick ratio of 1.02, a current ratio of 1.03, and a debt-to-equity ratio of 0.23. Its 50-day simple moving average stands at $27.12, while the 200-day simple moving average is at $24.43. The company boasts a market capitalization of $510.88 million, a price-to-earnings ratio of 13.14, and a beta of 0.50.

Quarterly Earnings Report

On October 28, Capital Bancorp released its quarterly earnings data. The company reported earnings per share (EPS) of $0.66, which fell short of analysts' consensus estimates of $0.68 by $0.02. Total revenue for the quarter was reported at $59.25 million. Analysts predict that the company will achieve an EPS of 2.37 for the current year, with a return on equity of 12.66% and a net margin of 14.49%.

Dividend Announcement

Recently, Capital Bancorp announced a quarterly dividend of $0.10 per share, which was paid to shareholders on November 20. Shareholders of record as of November 4 received this dividend, translating to an annualized yield of 1.30%. The company's dividend payout ratio currently stands at 17.17%.

Insider Transactions

In other developments, COO Steven M. Poynot acquired 2,000 shares of Capital Bancorp on November 1, at an average price of $25.36 per share, totaling $50,720. Following this purchase, Poynot's ownership in the company increased by 79.90%, holding a total of 4,503 shares valued at about $114,196. Additionally, CFO Dominic C. Canuso bought 1,000 shares on November 4 for an average price of $25.52 per share, increasing his ownership by 100% to hold 2,000 shares worth approximately $51,040. Insiders collectively own about 32.50% of the company’s stock.

Institutional Investment Activity

Recent changes in institutional holdings have also been noteworthy. BNP Paribas Financial Markets raised its stake in Capital Bancorp by a staggering 317.1% during the third quarter, now owning 7,809 shares valued at $201,000 after acquiring an additional 5,937 shares. Others, such as Connor Clark & Lunn Investment Management Ltd. and Barclays PLC, have also increased their holdings significantly, reflecting growing institutional interest. In total, hedge funds and institutional investors own approximately 56.14% of Capital Bancorp's stock.

About Capital Bancorp

Founded as a bank holding company, Capital Bancorp, Inc. operates Capital Bank, N.A., providing a range of banking products and services to businesses, non-profit organizations, and entrepreneurs primarily in Maryland, Virginia, and the District of Columbia.

Conclusion: Is Capital Bancorp a Good Investment?

Considering the recent trading volume spikes and updated analyst ratings, potential investors may be weighing the decision to buy. While Capital Bancorp is rated as a "Moderate Buy" among analysts, it may be worthwhile to explore other investment opportunities highlighting stronger recommendations.

Capital, Bancorp, Stocks