Coastal Financial (CCB): 3 Reasons We Love This Stock

Coastal Financial currently trades at $97.35 and has been a dream stock for shareholders. It’s returned 601% since July 2020, blowing past the S&P 500’s 93.9% gain. The company has also beaten the index over the past six months as its stock price is up 14.8%.

Following the strength, is CCB a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.

Why Are We Positive On CCB?

Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ:CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.

1. Net Interest Income Skyrockets, Fueling Growth Opportunities

Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.

Coastal Financial’s net interest income has grown at a 46% annualized rate over the last four years, much better than the broader bank industry.

2. Forecasted Efficiency Ratio Shows Stronger Profits Ahead

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Investors focus on efficiency ratio changes rather than absolute levels, understanding that expense structures vary by revenue mix. Counterintuitively, lower efficiency ratios indicate better performance since they represent lower costs relative to revenue.

For the next 12 months, Wall Street expects Coastal Financial to rein in some of its expenses as it anticipates an efficiency ratio of 38.7% compared to 46% over the past year.

3. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Coastal Financial’s full-year EPS grew at an astounding 25.7% compounded annual growth rate over the last five years, better than the broader bank sector.

Final Judgment

These are just a few reasons why Coastal Financial ranks near the top of our list, and with its shares beating the market recently, the stock trades at 2.9× forward P/B (or $97.35 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More Than Coastal Financial

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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