Cathay General Bancorp currently has liabilities amounting to 659.25 million, with a Debt to Equity (D/E) ratio of 0.08. This ratio may imply that Cathay General is not leveraging its borrowing sufficiently. The advice module for Cathay General can be utilized to corroborate the current investment recommendations offered by analysts. These analysts evaluate the company's growth potential by examining all available fundamental, technical, and market data.
Continued study
Cathay General Bancorp (CATY) presents an attractive investment opportunity from a valuation perspective. The company's Price to Earnings (P/E) ratio stands at
14.38X, which is relatively lower compared to the industry average, suggesting that the stock could be undervalued. The firm's Price to Earnings to Growth (PEG) ratio is
2.08X, indicating potential for
future earnings growth. Furthermore, Cathay General Bancorp boasts a robust free cash flow of
$464 million, providing the company with ample liquidity for investment and growth opportunities. The company's Return on Assets (ROA) of 1.78% also demonstrates efficient use of its assets to generate profits. Therefore, considering these valuation metrics, Cathay General Bancorp appears to be a promising investment with potential for significant upside.
We determine the current worth of Cathay General Bancorp using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Cathay General Bancorp based exclusively on its
fundamental and basic
technical indicators. By analyzing Cathay General's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of
Cathay General's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Cathay General. We calculate exposure to Cathay General's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to Cathay General's related companies.
Cathay General Bancorp Investment Alerts
Cathay investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Cathay General Bancorp performance across your portfolios.Please check all
investment alerts for Cathay
Cathay General Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Cathay value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Cathay General competition to find
correlations between indicators driving the intrinsic value of Cathay.
Cathay General Gross Profit
Cathay General Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Cathay General previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Cathay General Gross Profit growth over the last 10 years. Please check Cathay General's
gross profit and other
fundamental indicators for more details.
Detailed Perspective On Cathay General
The firm reported the previous year's revenue of 790.51
M. Net Income was 360.64
M with profit before overhead, payroll, taxes, and interest of 775.97
M.
| 2020 | 2021 | 2022 | 2023 (projected) |
Net Income | 228.86 M | 298.3 M | 360.64 M | 312.42 M | Gross Profit | 537.43 M | 668.37 M | 775.97 M | 713.38 M |
Margins Breakdown
Cathay profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Cathay General itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Cathay General profit margins.
| EBITDA Margin | 0.66 |
| Gross Margin | 0.89 |
| Profit Margin | 0.47 |
Cathay General Revenue Per Employee is increasing over the last 8 years. The current value of Cathay General Revenue Per Employee is 629,675. Also, Cathay General Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. Cathay General Bancorp (CATY) is riding a bullish wave with a strong potential for continued growth.
With a current valuation of
$2.02B, the company's strong
financial position is reflected in its high EBITDA of
$592.01M and a robust net income from continuing operations of $360.6M. The bank's strong earnings are evident in its EPS estimate for the current year of $4.71 and a diluted EPS of $5.16. Cathay's
financial health is further demonstrated by its book value of $35.12 and a low payout ratio of 0.2625, indicating the company's ability to manage its cash well. The company's shares are largely held by institutions, with 72.42% of shares owned by
institutional investors. which typically indicates confidence in the company's
future prospects. However, the bank's probability of bankruptcy stands at 32.82%, a risk that potential investors should consider. Cathay's downside deviation of 2.35 and variance of 7.29 also indicate a certain level of risk. Despite these risks, the company's strong
financial performance and the bullish trend in the banking industry suggest that Cathay General Bancorp is well-positioned for future growth. .
Will price continue to rise in August 2023?
Cathay General Bancorp has recently experienced a decline in its Value At Risk (VAR) to -4.35. Generally, a decreasing VAR suggests an impending increase in financial risk, which could potentially signal a forthcoming price drop. However, this doesn't necessarily guarantee that the stock price will cease to rise in August 2023. Investors should stay alert and consider other crucial financial indicators and market conditions before making any investment decisions. This short-term risk could merely represent a temporary dip in an otherwise upward price trend. Cathay General Bancorp currently exhibits a below-average downside deviation. It has an Information Ratio of 0.05 and a Jensen Alpha of 0.08. Nevertheless, we recommend investors to further scrutinize Cathay General Bancorp's expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding various
market volatility trends often assists investors in timing the market.
The appropriate use of volatility indicators allows traders to gauge Cathay General's stock risk against market volatility during both bullish and bearish trends. The elevated level of volatility that accompanies bear markets can directly impact
Cathay General's stock price, adding stress to investors as they witness their shares' value decline. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Cathay General Bancorp (CATY) presents a complex investment scenario. With a
Valuation Market Value of 36.28 and a
Valuation Real Value of 35.04, the stock appears to be fairly valued. However, the Analyst Overall Consensus is a 'Hold', with 5 analysts maintaining this stance and only 1 recommending a 'Strong Buy'. The Analyst Target Price Estimated Value stands at 36, which is slightly below the Naive Expected Forecast Value of 38.1. The possible upside price of 40.78 offers some potential for growth, but the possible downside price of 35.42 also suggests risk. Investors should carefully consider these factors and their own risk tolerance before deciding to invest in Cathay General Bancorp. .
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Cathay General Bancorp. Please refer to our
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