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Is Now The Time To Look At Buying ServisFirst Bancshares, Inc. (NASDAQ:SFBS)?

Simply Wall St

ServisFirst Bancshares, Inc. (NASDAQ:SFBS), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on ServisFirst Bancshares’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for ServisFirst Bancshares

What's the opportunity in ServisFirst Bancshares?

Great news for investors – ServisFirst Bancshares is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $60.66, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that ServisFirst Bancshares’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will ServisFirst Bancshares generate?

NasdaqGS:SFBS Past and Future Earnings, January 14th 2020

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. Though in the case of ServisFirst Bancshares, it is expected to deliver a relatively unexciting earnings growth of 5.0%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since SFBS is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on SFBS for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy SFBS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on ServisFirst Bancshares. You can find everything you need to know about ServisFirst Bancshares in the latest infographic research report. If you are no longer interested in ServisFirst Bancshares, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.