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Is Hope Bancorp (HOPE) Stock Undervalued 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.

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

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 stock to keep an eye on is Hope Bancorp (HOPE - Free Report) . HOPE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.21. This compares to its industry's average Forward P/E of 10.61. HOPE's Forward P/E has been as high as 10.21 and as low as 5.76, with a median of 7.32, all within the past year.

Another notable valuation metric for HOPE is its P/B ratio of 0.73. 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. HOPE's current P/B looks attractive when compared to its industry's average P/B of 1.35. Over the past 12 months, HOPE's P/B has been as high as 0.82 and as low as 0.44, with a median of 0.56.

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. HOPE has a P/S ratio of 1.41. This compares to its industry's average P/S of 2.1.

Finally, our model also underscores that HOPE has a P/CF ratio of 8.59. 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. HOPE's P/CF compares to its industry's average P/CF of 8.61. Within the past 12 months, HOPE's P/CF has been as high as 8.59 and as low as 4.23, with a median of 5.96.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Hope Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HOPE feels like a great value stock at the moment.


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