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Is Erste Group Bank (EBKDY) Stock Undervalued Right Now?

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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is Erste Group Bank (EBKDY - Free Report) . EBKDY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 4.76. This compares to its industry's average Forward P/E of 7.96. Over the past 52 weeks, EBKDY's Forward P/E has been as high as 11.33 and as low as 4.54, with a median of 8.17.

We also note that EBKDY holds a PEG ratio of 0.30. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EBKDY's PEG compares to its industry's average PEG of 0.47. Within the past year, EBKDY's PEG has been as high as 0.48 and as low as 0.27, with a median of 0.43.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EBKDY has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.13.

Finally, we should also recognize that EBKDY has a P/CF ratio of 3.57. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.36. Over the past year, EBKDY's P/CF has been as high as 9.15 and as low as 3.40, with a median of 6.41.

Value investors will likely look at more than just these metrics, but the above data helps show that Erste Group Bank is likely undervalued currently. And when considering the strength of its earnings outlook, EBKDY sticks out at as one of the market's strongest value stocks.


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