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Is Customers Bancorp (CUBI) a Great Value Stock Right Now?

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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.

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Customers Bancorp (CUBI - Free Report) is a stock many investors are watching right now. CUBI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.89, which compares to its industry's average of 10.37. Over the last 12 months, CUBI's Forward P/E has been as high as 11.65 and as low as 4.96, with a median of 6.67.

Investors should also recognize that CUBI has a P/B ratio of 1.20. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.69. Over the past 12 months, CUBI's P/B has been as high as 1.97 and as low as 1.09, with a median of 1.32.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CUBI has a P/S ratio of 1.61. This compares to its industry's average P/S of 3.01.

Finally, investors should note that CUBI has a P/CF ratio of 9.99. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CUBI's current P/CF looks attractive when compared to its industry's average P/CF of 11.46. Over the past year, CUBI's P/CF has been as high as 22.20 and as low as 5.06, with a median of 9.88.

These are only a few of the key metrics included in Customers 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, CUBI looks like an impressive value stock at the moment.


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