Investors interested in Banks - Northeast stocks are likely familiar with Atlantic Capital Bancshares (ACBI) and Nicolet Bankshares (NCBS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Atlantic Capital Bancshares has a Zacks Rank of #2 (Buy), while Nicolet Bankshares has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ACBI has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ACBI currently has a forward P/E ratio of 12.98, while NCBS has a forward P/E of 13.73. We also note that ACBI has a PEG ratio of 0.51. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NCBS currently has a PEG ratio of 1.96.
Another notable valuation metric for ACBI is its P/B ratio of 1.44. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NCBS has a P/B of 1.47.
These metrics, and several others, help ACBI earn a Value grade of B, while NCBS has been given a Value grade of C.
ACBI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ACBI is likely the superior value option right now.
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Atlantic Capital Bancshares, Inc. (ACBI) : Free Stock Analysis Report
Nicolet Bankshares Inc. (NCBS) : Free Stock Analysis Report
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