Is FS Bancorp (FSBW) Stock Undervalued 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

FS Bancorp (FSBW) is a stock many investors are watching right now. FSBW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.85. This compares to its industry's average Forward P/E of 9.80. Over the past 52 weeks, FSBW's Forward P/E has been as high as 9 and as low as 5.68, with a median of 6.87.

Another notable valuation metric for FSBW is its P/B ratio of 1. 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. FSBW's current P/B looks attractive when compared to its industry's average P/B of 1.16. Within the past 52 weeks, FSBW's P/B has been as high as 1.18 and as low as 0.84, with a median of 0.96.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FSBW has a P/S ratio of 1.36. This compares to its industry's average P/S of 1.66.

Finally, investors should note that FSBW has a P/CF ratio of 5.45. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 8.84. Over the past year, FSBW's P/CF has been as high as 6.30 and as low as 4.65, with a median of 5.20.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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