Is Customers Bancorp (CUBI) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Customers Bancorp (CUBI). CUBI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 4.19, which compares to its industry's average of 10.19. Over the last 12 months, CUBI's Forward P/E has been as high as 11.31 and as low as 2.98, with a median of 4.60.
Another valuation metric that we should highlight is CUBI's P/B ratio of 0.66. 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. This company's current P/B looks solid when compared to its industry's average P/B of 0.91. Over the past year, CUBI's P/B has been as high as 0.95 and as low as 0.37, with a median of 0.50.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CUBI has a P/S ratio of 0.92. This compares to its industry's average P/S of 2.26.
Finally, investors will want to recognize that CUBI has a P/CF ratio of 4.20. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11. CUBI's P/CF has been as high as 8.57 and as low as 2.69, with a median of 3.75, all within the past year.
These are only a few of the key metrics included in Customers Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CUBI looks like an impressive value stock at the moment.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Customers Bancorp, Inc (CUBI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
