Critical Survey: BayFirst Financial (NASDAQ:BAFN) & Provident Financial (NASDAQ:PROV)

BayFirst Financial (NASDAQ:BAFN) and Provident Financial (NASDAQ:PROV) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for BayFirst Financial and Provident Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BayFirst Financial	1	0	0	0	1.00
Provident Financial	0	1	1	1	3.00

Provident Financial has a consensus target price of $18.00, suggesting a potential downside of 1.96%. Given Provident Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Provident Financial is more favorable than BayFirst Financial.

Insider and Institutional Ownership

16.9% of BayFirst Financial shares are owned by institutional investors. Comparatively, 71.3% of Provident Financial shares are owned by institutional investors. 56.6% of BayFirst Financial shares are owned by company insiders. Comparatively, 11.5% of Provident Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

BayFirst Financial has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Provident Financial has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Profitability

This table compares BayFirst Financial and Provident Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BayFirst Financial	-80.74%	-101.15%	-4.83%
Provident Financial	11.16%	5.23%	0.54%

Earnings & Valuation

This table compares BayFirst Financial and Provident Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BayFirst Financial	$104.19 million	2.02	-$22.94 million	($14.88)	-0.52
Provident Financial	$59.62 million	1.92	$6.66 million	$1.03	17.83

Provident Financial has lower revenue, but higher earnings than BayFirst Financial. BayFirst Financial is trading at a lower price-to-earnings ratio than Provident Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Provident Financial beats BayFirst Financial on 11 of the 15 factors compared between the two stocks.

About BayFirst Financial

BayFirst Financial Corp. operates as the bank holding company for BayFirst National Bank that provides community banking services for businesses and individuals. The company offers checking, savings, NOW, and money market deposit accounts, as well as certificates of deposit and individual retirement account; and safety deposit boxes. It also provides commercial real estate mortgages; construction and development, working capital, and business loans; auto, boat, and recreational vehicle loans; and residential mortgages, personal lines of credit, and home equity lines of credit. In addition, the company offers mobile and online banking, treasury management, wire transfers, cash management, merchant processing, remote deposit capture, night depositor, online bill payment, courier, retail investment, ACH originations, and other services. It operates full-service banking centers in St. Petersburg, Seminole, Pinellas Park, Clearwater, Sarasota, Tampa, Belleair Bluffs, and Bradenton, Florida. The company was formerly known as First Home Bancorp, Inc. and changed its name to BayFirst Financial Corp. in May 2021. BayFirst Financial Corp. was founded in 1999 and is headquartered in St. Petersburg, Florida.

About Provident Financial

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans. It also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. The company operates through full-service banking offices in Riverside County and San Bernardino County. Provident Financial Holdings, Inc. was founded in 1956 and is headquartered in Riverside, California.