Is RBB Bancorp (RBB) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 stock to keep an eye on is RBB Bancorp (RBB). RBB 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 7.75 right now. For comparison, its industry sports an average P/E of 14.24. Over the past year, RBB's Forward P/E has been as high as 9.80 and as low as 6.87, with a median of 8.84.
We should also highlight that RBB has a P/B ratio of 1.03. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.93. Over the past year, RBB's P/B has been as high as 1.20 and as low as 0.87, with a median of 1.08.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. RBB has a P/S ratio of 2.89. This compares to its industry's average P/S of 3.41.
Finally, our model also underscores that RBB has a P/CF ratio of 6.90. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.93. Within the past 12 months, RBB's P/CF has been as high as 10.96 and as low as 6.03, with a median of 8.31.
Value investors will likely look at more than just these metrics, but the above data helps show that RBB Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, RBB sticks out at as one of the market's strongest value stocks.
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