Should Value Investors Buy Capital Bancorp (CBNK) Stock?
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Capital Bancorp (CBNK) is a stock many investors are watching right now. CBNK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 7.54 right now. For comparison, its industry sports an average P/E of 8. Over the past 52 weeks, CBNK's Forward P/E has been as high as 10.09 and as low as 7.38, with a median of 8.22.
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. CBNK has a P/S ratio of 1.84. This compares to its industry's average P/S of 2.67.
Finally, investors will want to recognize that CBNK has a P/CF ratio of 7.49. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. CBNK's current P/CF looks attractive when compared to its industry's average P/CF of 13.57. Over the past year, CBNK's P/CF has been as high as 9.19 and as low as 6.66, with a median of 7.72.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Capital Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CBNK feels like a great value stock at the moment.
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Capital Bancorp, Inc. (CBNK) : Free Stock Analysis Report
