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Should Value Investors Buy RBB Bancorp (RBB) Stock?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

RBB Bancorp (RBB) is a stock many investors are watching right now. RBB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.74, which compares to its industry's average of 11.44. RBB's Forward P/E has been as high as 9.80 and as low as 6.24, with a median of 8.32, all within the past year.

Another valuation metric that we should highlight is RBB's P/B ratio of 0.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.87. Over the past 12 months, RBB's P/B has been as high as 1.20 and as low as 0.84, with a median of 1.05.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. RBB has a P/S ratio of 2.55. This compares to its industry's average P/S of 3.

Finally, we should also recognize that RBB has a P/CF ratio of 5.92. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. RBB's current P/CF looks attractive when compared to its industry's average P/CF of 11.89. Within the past 12 months, RBB's P/CF has been as high as 9.07 and as low as 5.38, with a median of 7.33.

These are only a few of the key metrics included in RBB 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, RBB looks like an impressive value stock at the moment.




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