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Is Customers Bancorp (CUBI) a Great Value Stock Right Now?

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.

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 company to watch right now is Customers Bancorp (CUBI). CUBI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.07, while its industry has an average P/E of 9.43. Over the past year, CUBI's Forward P/E has been as high as 11.65 and as low as 4.61, with a median of 6.54.

Another valuation metric that we should highlight is CUBI's P/B ratio of 1.02. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. CUBI's current P/B looks attractive when compared to its industry's average P/B of 1.72. Over the past year, CUBI's P/B has been as high as 1.97 and as low as 0.87, with a median of 1.27.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CUBI has a P/S ratio of 1.46. This compares to its industry's average P/S of 2.94.

Finally, we should also recognize that CUBI has a P/CF ratio of 10.12. 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 10.91. Over the past 52 weeks, CUBI's P/CF has been as high as 22.20 and as low as 5.06, with a median of 11.33.

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


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