Are Investors Undervaluing Customers Bancorp (CUBI) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Customers Bancorp (CUBI). CUBI is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.68. This compares to its industry's average Forward P/E of 10.24. Over the last 12 months, CUBI's Forward P/E has been as high as 9.68 and as low as 6.09, with a median of 7.83.
Another valuation metric that we should highlight is CUBI's P/B ratio of 1.11. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.79. Over the past year, CUBI's P/B has been as high as 1.17 and as low as 0.78, with a median of 0.95.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CUBI has a P/S ratio of 1.51. This compares to its industry's average P/S of 2.16.
Finally, we should also recognize that CUBI has a P/CF ratio of 11.95. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CUBI's P/CF compares to its industry's average P/CF of 15.20. Over the past 52 weeks, CUBI's P/CF has been as high as 12.58 and as low as 7.09, with a median of 9.05.
These are just a handful of the figures considered in Customers Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CUBI is an impressive value stock right now.
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Customers Bancorp, Inc (CUBI): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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