Value
6.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 7.0 |
| Fwd P/E | 9.0 |
| PEG | 4.9 |
| Analyst target | 3.0 |
- ▸Forward P/E: 12.0x
- ▸PEG: 1.63
SRCE · Why this verdict
Why 1st Source (SRCE) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
1st Source Corporation has beaten earnings estimates in 3 of the last 4 quarters with an average surprise of 11%, is in a golden cross breakout above all moving averages, and carries best-in-class 38% net margins among regional bank peers — but the stock has already surpassed its analyst price target with negative asymmetry and offers minimal near-term upside potential.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
1st Source Corporation earns net margins of approximately 38%, which the peer analysis rates as best-in-class among regional banks with a quality peer rank of 7.84 out of 10, and the Piotroski financial strength score of 8 out of 9 confirms broad balance sheet health. Peer-rank breakdown | Net margins remain above 30% over the next 4 reported quarters, sustaining the best-in-class profitability ranking relative to comparable regional bank peers. | →Stable |
| CounterRegional bank margins are highly sensitive to interest rate spreads; if the Federal Reserve cuts rates faster than expected, net interest margin compression could reduce the 38% margin advantage toward the peer average within 2 to 4 quarters. | ||
1st Source has beaten analyst estimates in 3 of the last 4 quarters (including beats of 16.1% in January 2026, 11.9% in October 2025, and 5.4% in July 2025) with an average positive surprise of 11.1%, demonstrating reliable execution and conservative guidance management. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with average surprise above 5%, confirming that management's ability to consistently outperform consensus estimates is a durable feature of the investor relationship. | →Stable |
| CounterThe most recent quarter came in exactly at consensus (the July 2026 period showed no surprise), suggesting that the guidance-beating pattern may be normalizing as analysts have improved their modeling of this small-cap regional bank. | ||
The stock is in a golden cross configuration with the 50-day moving average crossing above the 200-day moving average, trading above all major moving averages, with rising on-balance volume and a moving average convergence-divergence reading of 10 out of 10 — the strongest technical setup available in the scoring model. Momentum breakdown | On-balance volume continues rising and the stock holds above its 200-day moving average for at least 9 of the next 12 months, sustaining the golden cross pattern through the earnings cycle. | ↓Deteriorating |
| CounterWith RSI at 63 and the stock near its 52-week high (2.1% away), the golden cross breakout may be close to exhausting near-term buying interest; breakouts in small-cap financials with limited analyst coverage often fade quickly once momentum buyers rotate. | ||
The stock has surpassed its analyst price target with -12.5% upside remaining at the current $77.40 price, and the take-profit level is only $77.50 — essentially the current price — making the near-term risk-reward asymmetry strongly negative at -1.64 downside-to-upside. Warnings | Analyst targets are revised upward by at least 15% following the next earnings beat, creating renewed upside to a new target of $88 or above, allowing the position to rebuild favorable asymmetry. | →Stable |
| CounterA regional bank trading above its analyst target in a rising rate environment with weak growth (earnings growth component only 3.5 out of 10 and revenue growth 3.8 out of 10) has limited fundamental catalysts to justify an analyst target upgrade, making the asymmetry likely to remain unfavorable. | ||
1st Source Corporation earns net margins of approximately 38%, which the peer analysis rates as best-in-class among regional banks with a quality peer rank of 7.84 out of 10, and the Piotroski financial strength score of 8 out of 9 confirms broad balance sheet health.
→StablePeer-rank breakdown
- Expectation
- Net margins remain above 30% over the next 4 reported quarters, sustaining the best-in-class profitability ranking relative to comparable regional bank peers.
CounterRegional bank margins are highly sensitive to interest rate spreads; if the Federal Reserve cuts rates faster than expected, net interest margin compression could reduce the 38% margin advantage toward the peer average within 2 to 4 quarters.
1st Source has beaten analyst estimates in 3 of the last 4 quarters (including beats of 16.1% in January 2026, 11.9% in October 2025, and 5.4% in July 2025) with an average positive surprise of 11.1%, demonstrating reliable execution and conservative guidance management.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with average surprise above 5%, confirming that management's ability to consistently outperform consensus estimates is a durable feature of the investor relationship.
CounterThe most recent quarter came in exactly at consensus (the July 2026 period showed no surprise), suggesting that the guidance-beating pattern may be normalizing as analysts have improved their modeling of this small-cap regional bank.
The stock is in a golden cross configuration with the 50-day moving average crossing above the 200-day moving average, trading above all major moving averages, with rising on-balance volume and a moving average convergence-divergence reading of 10 out of 10 — the strongest technical setup available in the scoring model.
↓DeterioratingMomentum breakdown
- Expectation
- On-balance volume continues rising and the stock holds above its 200-day moving average for at least 9 of the next 12 months, sustaining the golden cross pattern through the earnings cycle.
CounterWith RSI at 63 and the stock near its 52-week high (2.1% away), the golden cross breakout may be close to exhausting near-term buying interest; breakouts in small-cap financials with limited analyst coverage often fade quickly once momentum buyers rotate.
The stock has surpassed its analyst price target with -12.5% upside remaining at the current $77.40 price, and the take-profit level is only $77.50 — essentially the current price — making the near-term risk-reward asymmetry strongly negative at -1.64 downside-to-upside.
→StableWarnings
- Expectation
- Analyst targets are revised upward by at least 15% following the next earnings beat, creating renewed upside to a new target of $88 or above, allowing the position to rebuild favorable asymmetry.
CounterA regional bank trading above its analyst target in a rising rate environment with weak growth (earnings growth component only 3.5 out of 10 and revenue growth 3.8 out of 10) has limited fundamental catalysts to justify an analyst target upgrade, making the asymmetry likely to remain unfavorable.
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 1.2 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 5.9 |
| Piotroski F | 8.9 |
- ▸Strong margins: 39%
- ▸Strong Piotroski F-Score: 8/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 7.9 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.2 |
| erm sentiment | 5.0 |
Insider
5.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 7.9 |
| growth rank | 5.6 |
- ▸Best-in-class margins
Technical
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.4 |
| support resistance | 2.8 |
| 52w position | 9.4 |
Risk (lower is worse)
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 6.7 |
| volatility | 8.1 |
| put call | 10.0 |
| implied vol | 2.9 |
| beta | 9.6 |
- ▸High IV: 63%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.5 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:66d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.7=NEGATIVE
Warning (2)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.68
Upside
-13.8%
Downside
8.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.1B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.3>=4.5. Top dim: Risk (lower is worse) at 7.6; weakest: Sentiment at 5.1. No conviction either direction.
The strongest dimensions are Risk (lower is worse) at 7.6, Growth at 7.2, and Catalyst at 7.0; the weakest are Sentiment at 5.1, Momentum at 5.3, and Technical at 5.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -1.68 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Best In Class Margins Peer Rank
Trip ifNet margin falls below 25% for 2 consecutive quarters, indicating interest rate changes or credit losses are meaningfully compressing the best-in-class margin advantage.
- P2Earnings Beat Consistency
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, indicating the conservative guidance management approach is breaking down.
- P3Golden Cross Strong Momentum
Trip ifOn-balance volume falls below its 90-day moving average for more than 6 consecutive weeks, indicating institutional distribution is replacing accumulation in the breakout pattern.
- P4Target Exceeded Negative Asymmetry
Trip ifAnalyst consensus price target remains below $85.00 for 6 consecutive months, indicating targets are not being revised upward to restore favorable risk-reward asymmetry.