Is First Business Financial Services (FBIZ) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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 stock to keep an eye on is First Business Financial Services (FBIZ). FBIZ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.78, which compares to its industry's average of 10.40. Over the past year, FBIZ's Forward P/E has been as high as 9.33 and as low as 5.93, with a median of 7.24.
We should also highlight that FBIZ has a P/B ratio of 1.14. 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. This stock's P/B looks solid versus its industry's average P/B of 1.84. Over the past 12 months, FBIZ's P/B has been as high as 1.27 and as low as 0.82, with a median of 1.02.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FBIZ has a P/S ratio of 1.48. This compares to its industry's average P/S of 1.86.
Finally, investors will want to recognize that FBIZ has a P/CF ratio of 6.70. 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 stock's P/CF looks attractive against its industry's average P/CF of 10.16. Over the past 52 weeks, FBIZ's P/CF has been as high as 7.46 and as low as 4.42, with a median of 5.68.
These figures are just a handful of the metrics value investors tend to look at, but they help show that First Business Financial Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FBIZ feels like a great value stock at the moment.
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First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report
