BCB Bancorp Inc (NASDAQ:BCBP), operating in the financial services industry based in United States, saw its share price hover around a small range of $14.55 to $15.95 over the last few weeks. But is this actually reflective of the share value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BCB Bancorp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for BCB Bancorp
What’s the opportunity in BCB Bancorp?
According to my relative valuation model, the stock seems to be currently fairly priced. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 20.72x is currently trading slightly above its industry peers’ ratio of 17.46x, which means if you buy BCB Bancorp today, you’d be paying a relatively fair price for it. And if you believe BCB Bancorp should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, BCB 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.
Can we expect growth from BCB Bancorp?
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. BCB Bancorp’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? BCBP’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at BCBP? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on BCBP, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for BCBP, which means it’s worth diving deeper into 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 BCB Bancorp. You can find everything you need to know about BCB Bancorp in the latest infographic research report. If you are no longer interested in BCB 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.