Territorial Bancorp Inc (NASDAQ:TBNK), operating in the financial services industry based in United States, received a lot of attention from a substantial price movement on the NasdaqGS in the over the last few months, increasing to $32.83 at one point, and dropping to the lows of $29.25. 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 TBNK’s current trading price of $30.99 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 TBNK’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Territorial Bancorp
What is TBNK worth?
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 16.6x is currently trading slightly below its industry peers’ ratio of 19.2x, which means if you buy TBNK today, you’d be paying a reasonable price for it. And if you believe that TBNK should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Furthermore, TBNK’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for TBNK to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Can we expect growth from TBNK?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 TBNK future expectations. However, with a relatively muted profit growth of 8.61% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for TBNK, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in TBNK’s growth outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at TBNK? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on TBNK, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive growth outlook may mean it’s worth diving deeper into other factors 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 Territorial Bancorp. You can find everything you need to know about TBNK in the latest infographic research report. If you are no longer interested in Territorial 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.