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Are Investors Undervaluing HomeTrust Bancshares (HTBI) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is HomeTrust Bancshares (HTBI). HTBI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.82 right now. For comparison, its industry sports an average P/E of 8.93. Over the last 12 months, HTBI's Forward P/E has been as high as 17.95 and as low as 8.82, with a median of 13.71.

Another valuation metric that we should highlight is HTBI's P/B ratio of 0.89. 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 attractive against its industry's average P/B of 1.77. Over the past year, HTBI's P/B has been as high as 1.32 and as low as 0.89, with a median of 1.20.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HTBI has a P/S ratio of 2.25. This compares to its industry's average P/S of 2.84.

Finally, our model also underscores that HTBI has a P/CF ratio of 7.15. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.45. Over the past year, HTBI's P/CF has been as high as 18.06 and as low as 7.15, with a median of 14.07.

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


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