MeritValue

Merchants Bancorp

MBINdata completeness 88%11 fiscal years on file
The thesis, from the filings

Merchants Bancorp earns about 75% on invested capital, but has diluted owners by 6% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $51.22 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$311.9M1$480.8M2$1.08B3$1.3B3$1.2B3
Net income$227.1M4$219.7M5$279.2M6$320.4M6$218.8M6
Operating cash flow−$49.2M7$975.8M8−$356.4M9−$835.3M9−$341.2M9
Capital expenditure$3.65M10$6.76M11$7.53M12$18.4M12$20.9M12
Free cash flow (derived)−$52.9M7$969M8−$363.9M9−$853.7M9−$362.2M9
Total debt—————
Cash & equivalents$1.03B13$226.2M13$584.4M14$476.6M14$212.2M14
Diluted shares43.3M43.3M43.3M45.0M45.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$496.44
your share of equity
Profit it earned you last year
$47.62
Free cash flow it threw off
−$78.83
Debt you’d be carrying
—

10 shares is a claim on $496.44 of net worth that earned you $47.62 and generated −$78.83 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
75% avg · 5y
FY21 206%FY22 28%FY23 70%FY24 41%FY25 31%

It earned an average 75% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+6% shares · 5y

Share count is up 6% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$51.22
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$227.1M
  • growthAssumed0.0%
Graham Number
$64.98
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-24-003005 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-001941 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0001104659-26-021549 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-003005 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-001941 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001104659-26-021549 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-003005 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-001941 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001104659-26-021549 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-24-003005 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-25-001941 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001104659-26-021549 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001558370-23-004012 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2023-12-31 · accession 0001104659-26-021549 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)