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Are Investors Undervaluing OP Bancorp (OPBK) 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.

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.

OP Bancorp (OPBK - Free Report) is a stock many investors are watching right now. OPBK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.36, which compares to its industry's average of 10.52. Over the past year, OPBK's Forward P/E has been as high as 7.19 and as low as 4.98, with a median of 6.18.

We should also highlight that OPBK has a P/B ratio of 0.75. 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 attractive against its industry's average P/B of 1.54. Over the past 12 months, OPBK's P/B has been as high as 1.07 and as low as 0.62, with a median of 0.81.

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. OPBK has a P/S ratio of 1.11. This compares to its industry's average P/S of 1.74.

Finally, we should also recognize that OPBK has a P/CF ratio of 4.04. 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. OPBK's P/CF compares to its industry's average P/CF of 10.96. Over the past 52 weeks, OPBK's P/CF has been as high as 5.54 and as low as 3.27, with a median of 4.37.

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


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