We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is East West Bancorp (EWBC) Stock Undervalued Right Now?
Read MoreHide Full Article
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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
East West Bancorp (EWBC - Free Report) is a stock many investors are watching right now. EWBC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.66, while its industry has an average P/E of 13.45. EWBC's Forward P/E has been as high as 10.83 and as low as 7.71, with a median of 9.55, all within the past year.
Investors will also notice that EWBC has a PEG ratio of 0.97. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EWBC's industry has an average PEG of 1.67 right now. Over the last 12 months, EWBC's PEG has been as high as 1.08 and as low as 0.80, with a median of 0.96.
We should also highlight that EWBC has a P/B ratio of 1.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.57. Over the past year, EWBC's P/B has been as high as 1.82 and as low as 1.16, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. EWBC has a P/S ratio of 3.02. This compares to its industry's average P/S of 3.21.
Finally, investors will want to recognize that EWBC has a P/CF ratio of 8.41. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.93. Over the past year, EWBC's P/CF has been as high as 9.89 and as low as 7.02, with a median of 8.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that East West Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EWBC feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is East West Bancorp (EWBC) Stock Undervalued Right Now?
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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
East West Bancorp (EWBC - Free Report) is a stock many investors are watching right now. EWBC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.66, while its industry has an average P/E of 13.45. EWBC's Forward P/E has been as high as 10.83 and as low as 7.71, with a median of 9.55, all within the past year.
Investors will also notice that EWBC has a PEG ratio of 0.97. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EWBC's industry has an average PEG of 1.67 right now. Over the last 12 months, EWBC's PEG has been as high as 1.08 and as low as 0.80, with a median of 0.96.
We should also highlight that EWBC has a P/B ratio of 1.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.57. Over the past year, EWBC's P/B has been as high as 1.82 and as low as 1.16, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. EWBC has a P/S ratio of 3.02. This compares to its industry's average P/S of 3.21.
Finally, investors will want to recognize that EWBC has a P/CF ratio of 8.41. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.93. Over the past year, EWBC's P/CF has been as high as 9.89 and as low as 7.02, with a median of 8.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that East West Bancorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EWBC feels like a great value stock at the moment.