• Investors wondering if Customers Bancorp at around US$67.66 still offers value, or if most of the easy gains are already behind it, can use this review to frame that question using several valuation lenses.
• The share price has moved 2.2% over the last week and 0.3% over the last month, with a year to date return of a 9.2% decline, set against a 34.9% gain over the past year, a 3 year return of 265.3%, and a 5 year return of 111.3%.
• Recent coverage has focused on Customers Bancorp's position within the US banking sector and how investors are treating regional bank risk more broadly. This helps explain why some are reassessing the stock after such strong multi year returns. Other commentary has highlighted how funding costs and loan growth expectations could affect sentiment toward banks like Customers Bancorp, giving important context to the latest share price moves.
• On Simply Wall St's 6 point valuation checklist, Customers Bancorp currently scores 6 out of 6. The next sections will break down how methods like discounted cash flow, multiples and other tools line up on value, before finishing with a broader way to think about what the market might be missing.

Customers Bancorp delivered 34.9% returns over the last year. See how this stacks up to the rest of the Banks industry.

Approach 1: Customers Bancorp Excess Returns Analysis

The Excess Returns model looks at how much profit a company can generate above its cost of equity, then capitalizes those extra earnings to estimate what the shares could be worth today.

For Customers Bancorp, the starting point is a Book Value of $61.87 per share and a Stable EPS estimate of $9.86 per share, based on weighted future Return on Equity estimates from 10 analysts. The average Return on Equity input into the model is 12.90%, compared with a Cost of Equity of $5.59 per share. That gap produces an Excess Return of $4.28 per share, which is the core driver of value in this framework.

The model also uses a Stable Book Value of $76.47 per share, based on weighted future Book Value estimates from 6 analysts, to reflect how the equity base could evolve over time. Combining these elements, the Excess Returns model arrives at an intrinsic value of about $186.16 per share.

Against the recent share price around $67.66, this implies the stock is 63.7% undervalued on this measure.

Result: UNDERVALUED

Our Excess Returns analysis suggests Customers Bancorp is undervalued by 63.7%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Customers Bancorp.

Approach 2: Customers Bancorp Price vs Earnings

For a profitable bank, the P/E ratio is a straightforward way to link what you pay for each share to the earnings that support it. It helps you see how much investors are currently willing to pay for each dollar of profit.

What counts as a “normal” or “fair” P/E usually reflects two things: how quickly earnings are expected to grow and how much risk investors see in those earnings. Higher growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk tends to line up with a lower multiple.

Customers Bancorp currently trades on a P/E of 11.07x. That is close to the Banks industry average of 11.15x and sits below the peer average of 13.57x. Simply Wall St’s Fair Ratio for Customers Bancorp is 15.05x, which is an estimate of the P/E that might be expected given factors such as its earnings profile, industry, profit margins, market value and risk characteristics.

The Fair Ratio can be more informative than a simple peer or industry comparison, because it adjusts for company specific traits rather than assuming one size fits all. Set against the current 11.07x, the 15.05x Fair Ratio suggests the shares screen as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Customers Bancorp Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Customers Bancorp to the numbers by linking your view of its future revenue, earnings and margins to a Fair Value, then comparing that Fair Value to the current price to help you decide whether the stock looks appealing or stretched. All this is available within a simple tool on the Community page that updates as new news or earnings arrive, and that already shows how one bullish Customers Bancorp Narrative anchors on a Fair Value of US$104.00 while a more cautious one sits closer to US$68.19, giving you a live range of perspectives to test your own view against.

Do you think there's more to the story for Customers Bancorp? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.