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Should Value Investors Buy Capital Bancorp (CBNK) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

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.

Capital Bancorp (CBNK - Free Report) is a stock many investors are watching right now. CBNK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.32, while its industry has an average P/E of 8.92. CBNK's Forward P/E has been as high as 11.94 and as low as 7.38, with a median of 9.29, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CBNK has a P/S ratio of 1.93. This compares to its industry's average P/S of 2.76.

Finally, investors should note that CBNK has a P/CF ratio of 7.66. 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 P/CF compares to its industry's average P/CF of 16.13. Over the past year, CBNK's P/CF has been as high as 9.61 and as low as 6.65, with a median of 8.27.

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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