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Are Investors Undervaluing Atlantic Capital Bancshares (ACBI) Right Now?

Zacks Equity Research
·3 mins read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Atlantic Capital Bancshares (ACBI). ACBI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We also note that ACBI holds a PEG ratio of 1.15. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ACBI's PEG compares to its industry's average PEG of 1.37. ACBI's PEG has been as high as 2.05 and as low as 0.54, with a median of 1.35, all within the past year.

Another valuation metric that we should highlight is ACBI's P/B ratio of 0.75. The P/B ratio is used to compare a stock's market value with 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 1.47. Within the past 52 weeks, ACBI's P/B has been as high as 1.34 and as low as 0.63, with a median of 1.22.

Finally, our model also underscores that ACBI has a P/CF ratio of 4.81. 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. ACBI's P/CF compares to its industry's average P/CF of 12.86. ACBI's P/CF has been as high as 12.04 and as low as 3.70, with a median of 7.09, all within the past year.

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


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Zacks Investment Research