Coastal Financial Corp (NASDAQ: CCB) is back in the spotlight after analysts at Keefe, Bruyette & Woods (KBW) gave it a strong vote of confidence. They kept their Outperform rating on the stock and maintained a $114 price target.

This comes after the company admitted to a financial reporting mistake, leading to a restatement of earnings. While that might sound bad, analysts believe it doesn’t affect the company’s actual performance. So, should investors be worried, or is this a chance to buy?

CCB Defies Odds

Financial mistakes can make investors nervous because they raise questions about a company’s stability. But KBW says this case is different. The adjustments don’t change important numbers like earnings per share (EPS) or core revenue.

Coastal Financial has already fixed the issue and assured investors that its numbers now follow Generally Accepted Accounting Principles (GAAP).

More importantly, the company’s business is still growing fast, with expected earnings rising over 155% from 2024 to 2026.

With a $1.24 billion market value, Coastal Financial might seem expensive. But analysts see room for growth, especially with its focus on digital banking and banking as a service (BaaS).

CCB’s Green Flags

• Low Credit Risk- Coastal’s lending model is safe. Nearly 98% of bad loans are covered by partners, reducing financial risk.
• Strong Partnerships- The company is working with three new national partners, which could speed up its BaaS growth.
• Smart Money Moves- Coastal sold $845.5 million in loans last quarter, helping it manage risks better.
• Favorable Market Conditions- Lower interest rates could increase profits, making the company even stronger.

Big Bets on CCB 

KBW isn’t the only firm betting on Coastal Financial. Raymond James recently raised its price target from $88 to $100, citing strong earnings and a solid financial strategy.

The stock has dipped recently, which some investors see as a buying opportunity. However, since it’s already priced higher than many small banks, short-term swings are possible.

Coastal Financial has shown that a financial restatement doesn’t always mean trouble. With strong earnings growth, a low-risk business model, and new partnerships, it remains a promising stock in the digital banking world.

For those looking at small-cap financial stocks, CCB could be a smart investment, but expect some ups and downs along the way.