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Is Customers Bancorp (CUBI) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

One company to watch right now is Customers Bancorp (CUBI - Free Report) . CUBI is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.41. This compares to its industry's average Forward P/E of 11.38. Over the past year, CUBI's Forward P/E has been as high as 9.68 and as low as 6.09, with a median of 7.82.

We should also highlight that CUBI has a P/B ratio of 1.17. 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. This stock's P/B looks attractive against its industry's average P/B of 1.94. Over the past year, CUBI's P/B has been as high as 1.31 and as low as 0.78, with a median of 0.95.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CUBI has a P/S ratio of 1.47. This compares to its industry's average P/S of 2.24.

Finally, investors should note that CUBI has a P/CF ratio of 13.17. 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 P/CF compares to its industry's average P/CF of 17.13. CUBI's P/CF has been as high as 13.55 and as low as 7.09, with a median of 9.04, all within the past year.

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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