Back to top

Image: Bigstock

Is Midland States Bancorp (MSBI) Stock Undervalued Right Now?

Read MoreHide Full Article

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company value investors might notice is Midland States Bancorp (MSBI - Free Report) . MSBI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.72. This compares to its industry's average Forward P/E of 10.56. Over the past 52 weeks, MSBI's Forward P/E has been as high as 9.27 and as low as 7.17, with a median of 8.21.

Another notable valuation metric for MSBI is its P/B ratio of 0.92. 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. MSBI's current P/B looks attractive when compared to its industry's average P/B of 1.74. Over the past year, MSBI's P/B has been as high as 1.01 and as low as 0.78, with a median of 0.89.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MSBI has a P/S ratio of 1.95. This compares to its industry's average P/S of 2.89.

Finally, our model also underscores that MSBI has a P/CF ratio of 6.01. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 13.65. Over the past year, MSBI's P/CF has been as high as 10.45 and as low as 5.44, with a median of 6.61.

These are only a few of the key metrics included in Midland States Bancorp's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MSBI looks like an impressive value stock at the moment.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Midland States Bancorp, Inc. (MSBI) - free report >>

Published in