Security Federal walked into its Q3 2026 report with the stock flat at $46.85, unmoved in the first trading session after earnings. On the surface, a quarterly Basic EPS of $1.16 and revenue of $15.462 million look like steady, workmanlike banking results. The real story sits in the longer arc. Over the past year, earnings growth of 38.9% and a trailing net margin of 22.4% now collide with a P/E of 10.4x and a DCF figure that points to a share price well above its indicated cash flow value.
Like the combination of 38.9% earnings growth, a 22.4% net margin and a 10.4x P/E at Security Federal but wondering how this stacks up against other banks with strong profitability and conservative balance sheets? Compare it with our list of solid balance sheet and fundamentals stocks (24 results) .
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs. Q3 2025):US$15.462 million compared with US$14.913 million (up about 3.7%)
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Net Income (Q3 2026 vs. Q3 2025):US$3.587 million compared with US$3.173 million (up about 13.1%)
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Basic EPS (Q3 2026 vs. Q3 2025):US$1.16 compared with US$1.01 (up about 15.0%)
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Net Interest Margin (Q3 2026 trailing 12 months vs. Q3 2025 trailing 12 months):3.13% compared with 3.02% (improved slightly year over year)
Prefer clean charts instead of another wall of earnings tables and footnotes? Explore a full visual breakdown of Security Federal, with its valuation front and center, in the interactive company report for Security Federal.
Security Federal: Earnings Momentum And Bullish Signals
Security Federal's Q3 picture leans supportive for an optimistic view. Revenue moved to US$15.462 million and net income to US$3.587 million, with Basic EPS at US$1.16. Profit expansion outpaced top line progress, which fits a story of disciplined community banking rather than aggressive balance sheet stretch. A slightly higher net interest margin at 3.13% over the last year signals some pricing power in a rate sensitive business. With the share price flat after the release, the market reaction looks calm rather than concerned.
Security Federal: Where The Bear Case Still Bites
Risks for Security Federal have not disappeared. Revenue growth running behind earnings hints at cost control doing more of the work than fresh business volume. That can be difficult to repeat if operating expenses start to rise. A modest net interest margin at 3.13% also leaves limited cushion if funding costs climb or loan yields soften. The stock's 3 month gain of about 12.1% means expectations have risen. Any future slip in profitability or loan performance could test the patience of investors who have been rewarded recently.
With earnings moving faster than the share price and the DCF flagging a gap between cash flow value and market value, it is worth stress testing Security Federal's balance sheet resilience. Check the full financial health analysis of Security Federal stock before assuming today's profitability automatically translates into long term safety.
Hunt For Mispriced Earnings Power
Security Federal's steady quarter and muted price reaction show how sentiment can lag solid banking fundamentals. The real opportunity is spotting companies that could be mispriced before the market closes the gap.
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Company 1 - 35% below our estimate - ties high end processors to a tightly controlled software ecosystem for data center demand.
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Company 2 - 38% below our estimate - leans into heavy haul freight and applies AI tools to boost productivity in an asset light carrier network.
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Company 3 - 47% below our estimate - directs substantial capital toward AI focused infrastructure to strengthen personalized advertising, messaging tools and mixed reality hardware.
That is three of the list. See every one of the 30 undervalued companies on it →
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SFDL .
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