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Should You Think About Buying Eagle Bancorp, Inc. (NASDAQ:EGBN) Now?

Simply Wall St

Eagle Bancorp, Inc. (NASDAQ:EGBN), operating in the financial services industry based in United States, saw a decent share price growth in the teens level on the NASDAQCM 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. But what if there is still an opportunity to buy? Let’s examine Eagle Bancorp’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Eagle Bancorp

Is Eagle Bancorp still cheap?

Great news for investors – Eagle Bancorp is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $89.74, but it is currently trading at US$47.95 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Eagle Bancorp’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Eagle Bancorp generate?

NasdaqCM:EGBN Past and Future Earnings, January 10th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Eagle Bancorp, it is expected to deliver a relatively unexciting earnings growth of 2.8%, 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 EGBN is currently undervalued, it may be a great time to accumulate more of 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 EGBN for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy EGBN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, 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 Eagle Bancorp. You can find everything you need to know about Eagle Bancorp in the latest infographic research report. If you are no longer interested in Eagle Bancorp, 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.