What Does Atlantic Capital Bancshares Inc’s (NASDAQ:ACBI) Share Price Indicate?
Atlantic Capital Bancshares Inc (NASDAQ:ACBI), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NasdaqGS over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Atlantic Capital Bancshares’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Atlantic Capital Bancshares
Is Atlantic Capital Bancshares still cheap?
According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Atlantic Capital Bancshares’s ratio of 1.6x is trading slightly above its industry peers’ ratio of 1.38x, which means if you buy Atlantic Capital Bancshares today, you’d be paying a relatively fair price for it. And if you believe Atlantic Capital Bancshares should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Atlantic Capital Bancshares’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 the stock is less volatile than the wider market given its low beta.
What does the future of Atlantic Capital Bancshares 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 the company’s future expectations. Atlantic Capital Bancshares’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to 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 ACBI’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 ACBI? 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 tabs on ACBI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for ACBI, 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 Atlantic Capital Bancshares. You can find everything you need to know about Atlantic Capital Bancshares in the latest infographic research report. If you are no longer interested in Atlantic Capital Bancshares, 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.
