Riverview Bancorp Inc (NASDAQ:RVSB), operating in the financial services industry based in United States, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $9.58 and falling to the lows of $8.45. 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 Riverview Bancorp’s current trading price of $9.05 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 Riverview Bancorp’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 Riverview Bancorp
What’s the opportunity in Riverview Bancorp?
According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Riverview Bancorp’s ratio of 21.98x is trading slightly above its industry peers’ ratio of 21.97x, which means if you buy Riverview Bancorp today, you’d be paying a relatively fair price for it. And if you believe that Riverview Bancorp should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Furthermore, Riverview Bancorp’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 the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What does the future of Riverview Bancorp look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 the company’s future expectations. With profit expected to grow by 73.72% over the next year, the near-term future seems bright for Riverview Bancorp. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in RVSB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at RVSB? 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 RVSB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for RVSB, which means it’s worth further examining other factors such as the strength of its balance sheet, 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 Riverview Bancorp. You can find everything you need to know about Riverview Bancorp in the latest infographic research report. If you are no longer interested in Riverview 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.