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Is Now An Opportune Moment To Examine Texas Capital Bancshares, Inc. (NASDAQ:TCBI)?

Texas Capital Bancshares, Inc. (NASDAQ:TCBI), operating in the financial services industry based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$63.49 and falling to the lows of US$52.95. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Texas Capital Bancshares's current trading price of US$56.97 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Texas Capital Bancshares’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Texas Capital Bancshares

Is Texas Capital Bancshares still cheap?

Great news for investors – Texas Capital Bancshares is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $81.22, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Texas Capital Bancshares’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Texas Capital Bancshares?

NasdaqGS:TCBI Past and Future Earnings, February 17th 2020
NasdaqGS:TCBI Past and Future Earnings, February 17th 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Texas Capital Bancshares, it is expected to deliver a negative earnings growth of -3.7%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although TCBI is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to TCBI, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on TCBI for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Texas Capital Bancshares. You can find everything you need to know about Texas Capital Bancshares in the latest infographic research report. If you are no longer interested in Texas Capital Bancshares, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.