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Is Evans Bancorp (EVBN) Stock Undervalued Right Now?

Zacks Equity Research
·3 min read

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Evans Bancorp (EVBN) is a stock many investors are watching right now. EVBN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.20, while its industry has an average P/E of 9.99. EVBN's Forward P/E has been as high as 11.16 and as low as 6.11, with a median of 7.72, all within the past year.

Another notable valuation metric for EVBN is its P/B ratio of 0.68. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. EVBN's current P/B looks attractive when compared to its industry's average P/B of 0.92. Over the past year, EVBN's P/B has been as high as 1.41 and as low as 0.67, with a median of 0.89.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EVBN has a P/S ratio of 1.46. This compares to its industry's average P/S of 1.76.

Finally, investors will want to recognize that EVBN has a P/CF ratio of 9.08. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.35. Over the past year, EVBN's P/CF has been as high as 10.47 and as low as 5.19, with a median of 9.39.

Value investors will likely look at more than just these metrics, but the above data helps show that Evans Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, EVBN sticks out at as one of the market's strongest value stocks.


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