A Fresh Look at Customers Bancorp (CUBI) Valuation After Strong Q3 Results and Preferred Stock Redemption

Customers Bancorp (CUBI) caught investor attention after posting a strong third-quarter update that beat expectations for both revenue and net interest income, while unveiling plans to redeem $85 million in preferred stock.

See our latest analysis for Customers Bancorp.

Customers Bancorp’s strong earnings update and news of a preferred stock redemption have fueled renewed interest, helping the company build momentum after a period of sideways trading. Even with some recent volatility, the 45% year-to-date share price return and a total shareholder return of over 113% for the past three years highlight the stock’s robust trajectory in both the short and longer term.

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Given the company’s rapid earnings growth, analyst price targets well above current levels, and a significant discount to its estimated intrinsic value, the key question remains: Is Customers Bancorp truly undervalued, or are investors already pricing in further growth?

Most Popular Narrative: 18.6% Undervalued

With the most widely followed narrative setting fair value nearly 19% above the last close, the stock’s pricing appears to leave meaningful upside on the table. Strong digital banking catalysts, major business investments, and evolving team dynamics set the backdrop for a value thesis that looks beyond current market volatility.

The rapid digitization of commercial banking and payments is driving institutional clients to seek tech-focused, 24/7 banking solutions. This is a shift that Customers Bancorp capitalizes on through its proprietary cubiX platform. With payments volume of $1.5 trillion in 2024 and accelerating growth, ongoing regulatory clarity around digital assets and stablecoins positions Customers as the leading provider, supporting significant potential for deposit and fee income growth.

Read the complete narrative.

Ready to dig into the valuation math? The future price target is built on bold projections that include rapid earnings expansion and a digital platform strategy uncommon in traditional banking. Which surprising metric really moves the needle here? Find out what gives this narrative its edge before everyone else does.

Result: Fair Value of $84.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could quickly shift if regulatory changes slow digital asset growth, or if rising competition puts pressure on margins and loan origination.

Find out about the key risks to this Customers Bancorp narrative.

Another View: Market Multiples Send a Different Signal

While the value thesis points to upside, a look at price-to-earnings multiples shows that investors are paying a premium compared to peers and the broader industry. Customers Bancorp’s 14.5x multiple is higher than the US Banks industry average of 11.4x and above similar companies at 10.7x. It is still below the market's calculated fair ratio of 15.3x. The premium may indicate growth potential or could suggest a risk of overpaying given the current momentum.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Customers Bancorp Narrative

If you see things differently or prefer hands-on research, you can build your own Customers Bancorp story using the data in just a few minutes. Do it your way.

A great starting point for your Customers Bancorp research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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