At $20.47, Is Central Valley Community Bancorp (CVCY) A Buy?
Central Valley Community Bancorp (NASDAQ:CVCY), operating in the financial services industry based in United States, saw significant share price volatility over the past couple of months on the NasdaqCM, rising to the highs of $22.3 and falling to the lows of $18.97. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether CVCY’s current trading price of $20.47 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CVCY’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Central Valley Community Bancorp
Is CVCY still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 15.4x is currently trading slightly below its industry peers’ ratio of 16.5x, which means if you buy CVCY today, you’d be paying a reasonable price for it. And if you believe that CVCY should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, it seems like CVCY’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because CVCY’s stock is less volatile than the wider market given its low beta.
What does the future of CVCY look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at CVCY future expectations. CVCY’s earnings over the next few years are expected to increase by 24.49%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CVCY’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at CVCY? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on CVCY, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for CVCY, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Central Valley Community Bancorp. You can find everything you need to know about CVCY in the latest infographic research report. If you are no longer interested in Central Valley Community Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
