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When Should You Buy Hope Bancorp, Inc. (NASDAQ:HOPE)?

Simply Wall St

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Hope Bancorp, Inc. (NASDAQ:HOPE), operating in the financial services industry based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of $14.4 and falling to the lows of $12.37. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hope Bancorp's current trading price of $13.22 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 Hope Bancorp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Hope Bancorp

Is Hope Bancorp still cheap?

Good news, investors! Hope Bancorp is still a bargain right now. According to my valuation, the intrinsic value for the stock is $18.2, but it is currently trading at US$13.22 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Hope Bancorp’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Hope Bancorp generate?

NasdaqGS:HOPE Past and Future Earnings, June 24th 2019
NasdaqGS:HOPE Past and Future Earnings, June 24th 2019

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 the company's future expectations. However, with a negative profit growth of -3.2% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Hope Bancorp. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although HOPE is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to HOPE, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on HOPE for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Hope Bancorp. You can find everything you need to know about Hope Bancorp in the latest infographic research report. If you are no longer interested in Hope Bancorp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.