First Merchants Corporation (FRME) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+17.8%

$48.72

vs $41.36 price

Levered DCF

$59.42

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

-0.49

Distress zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	9.61×	11.66×	9.91×	10.73×	10.97×	13.6×	13×	10.61×
P/B	0.88×	1.01×	0.98×	1.17×	1.18×	1.08×	1.2×	1.2×
P/S	2.06×	2.21×	2.2×	3.33×	4.05×	3.62×	3.87×	3.49×
EV / EBITDA	10.67×	11.98×	9.89×	12.85×	8.93×	11.72×	12.68×	11.08×
Gross margin	61.0%	56.1%	64.8%	85.8%	93.5%	77.6%	79.8%	84.2%
Operating margin	24.7%	22.0%	25.9%	35.9%	43.3%	30.4%	35.1%	38.8%
Net margin	21.5%	19.1%	22.4%	31.2%	37.0%	26.6%	29.8%	32.9%
Current ratio	0.2×	0.13×	0.15×	0.16×	0.24×	0.22×	0.21×	0.17×
Debt / equity	0.41×	0.5×	0.46×	0.65×	0.33×	0.37×	0.41×	0.48×
Interest coverage	0.67×	0.54×	0.74×	3.01×	6.7×	2.56×	1.78×	2.72×
Dividend yield	3.9%	3.6%	3.7%	3.1%	2.7%	2.8%	2.4%	2.5%
Payout ratio	37.5%	41.5%	36.6%	33.4%	29.8%	38.0%	31.2%	26.2%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	9.2%	8.7%	10.0%	10.9%	10.7%	7.9%	9.2%	11.3%
Return on invested capital	-4.3%	5.3%	6.3%	6.1%	7.6%	5.5%	6.3%	7.5%
Return on assets	1.2%	1.1%	1.2%	1.2%	1.3%	1.1%	1.3%	1.6%
Free cash flow yield	13.1%	11.4%	11.8%	12.0%	9.6%	10.1%	8.3%	10.7%
Earnings yield	10.4%	8.7%	10.2%	9.4%	9.1%	7.3%	7.7%	9.4%
Enterprise value	$3.1B	$3.1B	$2.7B	$3.4B	$2.2B	$2.1B	$2.6B	$2.2B
Net debt / EBITDA	3.17×	2.98×	1.77×	3.98×	-0.03×	0.55×	2.15×	2.51×
Cash conversion cycle (days)	32	19	16	16	10	26	10	4