Is South Plains Financial (SPFI) Stock Undervalued 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
South Plains Financial (SPFI) is a stock many investors are watching right now. SPFI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Another valuation metric that we should highlight is SPFI's P/B ratio of 1.19. 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. SPFI's current P/B looks attractive when compared to its industry's average P/B of 1.66. Over the past 12 months, SPFI's P/B has been as high as 1.58 and as low as 0.89, with a median of 1.16.
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. SPFI has a P/S ratio of 1.51. This compares to its industry's average P/S of 1.74.
Finally, investors should note that SPFI has a P/CF ratio of 6.06. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.33. Within the past 12 months, SPFI's P/CF has been as high as 7.80 and as low as 5.04, with a median of 6.04.
Value investors will likely look at more than just these metrics, but the above data helps show that South Plains Financial is likely undervalued currently. And when considering the strength of its earnings outlook, SPFI sticks out at as one of the market's strongest value stocks.
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South Plains Financial, Inc. (SPFI) : Free Stock Analysis Report
