Central Pacific Financial Corp (NYSE:CPF), operating in the financial services industry based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $31.32 and falling to the lows of $27.47. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Central Pacific Financial’s current trading price of $28.33 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Central Pacific Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Central Pacific Financial

What’s the opportunity in Central Pacific Financial?

The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Central Pacific Financial’s ratio of 20.9x is trading slightly above its industry peers’ ratio of 17.35x, which means if you buy Central Pacific Financial today, you’d be paying a relatively reasonable price for it. And if you believe Central Pacific Financial should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Central Pacific Financial’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What kind of growth will Central Pacific Financial generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 61.41% over the next couple of years, the future seems bright for Central Pacific Financial. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.