Should Value Investors Buy Capital Bancorp (CBNK) Stock?
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.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Capital Bancorp (CBNK). CBNK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.53, while its industry has an average P/E of 9.77. Over the last 12 months, CBNK's Forward P/E has been as high as 9.53 and as low as 5.33, with a median of 7.65.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CBNK has a P/S ratio of 1.65. This compares to its industry's average P/S of 1.84.
Finally, investors should note that CBNK has a P/CF ratio of 9.08. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CBNK's P/CF compares to its industry's average P/CF of 11.75. Over the past year, CBNK's P/CF has been as high as 9.08 and as low as 5.22, with a median of 7.09.
Value investors will likely look at more than just these metrics, but the above data helps show that Capital Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, CBNK sticks out at as one of the market's strongest value stocks.
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Capital Bancorp, Inc. (CBNK) : Free Stock Analysis Report
