Is Preferred Bank (California) overvalued or undervalued?

As of 25 April 2024, Preferred Bank (California) has moved from an expensive to a fair valuation grade. The company appears to be fairly valued at present. The P/E ratio stands at 10, which is significantly lower than the industry average, while the Price to Book Value is 1.58. Additionally, the EV to EBITDA ratio is 2.09, indicating a reasonable valuation compared to its earnings potential.
In comparison to its peers, Preferred Bank's P/E ratio of 10 is notably lower than Stock Yards Bancorp, Inc., which has a P/E of 17.74, and First Busey Corp., which is at 35.65. Other peers like S&T Bancorp, Inc. and Veritex Holdings, Inc. have P/E ratios of 10.83 and 13.04, respectively, reinforcing the notion that Preferred Bank is positioned fairly within its competitive landscape. Notably, the company's stock has outperformed the S&P 500 over the past year, returning 15.57% compared to the index's 10.26%, which may further support its fair valuation status.