SouthState Faces Slower Growth and Efficiency-Ratio Pressure

StockStory said it sees limited appeal in SouthState, pointing to forecasts for slower net interest income growth and weaker operating efficiency. The publisher contrasted an expected 3.4% increase over the next 12 months with 28.5% annualized growth in the prior two years.

Wall Street analysts also expect SouthState’s efficiency ratio to rise to 52.7% over the coming year from 50.2% in the past year, according to the article. The ratio compares non-interest expenses with revenue; a higher figure means expenses take a larger share of revenue.

SouthState’s earnings per share grew at a 6.5% compound annual rate over five years, below its 13.6% annualized revenue growth, StockStory said. The publisher argued that the gap points to declining profitability per share as the company expanded.

The stock gained 6.4% over six months, trailing the S&P 500’s 16.6% return. It traded at 1 times forward book value, or $99.58 a share, when the article was published. StockStory called the valuation reasonable but said it saw no major opportunity.