The way we store, save and spend money has evolved in the last decade. We can thank two driving factors for that: technology and cryptocurrency.
These innovations led to “neobanking” — banks that offer the same services as traditional ones, only in the digital space.
Crypto provides an alternative currency in digital transactions.
Analysts expect the digital transaction sector to double in value in the next five years:
Statista expects digital transactions to reach $3.2 billion by 2026. That's a 110.5% increase in five years!
The broadening acceptance of crypto, coupled with new technology, makes these digital transactions seamless.
A Power Stock that stands to benefit from this trend is Customers Bancorp Inc. (NYSE: CUBI).
Customers Bancorp is a regional bank that operates mainly in the northeastern U.S.
CUBI scores a “Strong Bullish” 89 out of 100 on our Stock Power Rating system, and we expect it to beat the broader market by 3X in the next 12 months.
CUBI Stock: Excellent Growth, Value and Momentum
I like CUBI stock for two main reasons:
- In the fourth quarter of 2021, the amount of digital-related deposits with the bank totaled $1.9 billion. This is a 27% jump in a single quarter.
- The company recently launched a digital token to make real-time payments and started onboarding cryptocurrency clients to use CUBI’s blockchain in late 2021.
CUBI goes far beyond traditional banking.
By launching its own blockchain and digital payment system, it’s one of the first banks — and one of the smallest — to jump into cryptocurrency banking.
To bolster its position, Customers Bancorp hired a new team to support commercial cryptocurrency and digital transactions. Most of the team is from digital asset pioneer Silvergate Capital (NYSE: SI).
You can see above that CUBI stock skyrocketed 132% from May 2021 to January 2022. This was thanks to its adoption of blockchain and cryptocurrency.
Broader market headwinds pushed CUBI down. However, the stock remains up 36.8% from where it was 12 months ago. It's crushing the rest of the banking sector.
Customers Bancorp Inc. stock scores an 89 overall on our Stock Power Rating system.
That means we are “Strong Bullish” on CUBI and expect it to crush the broader market by at least three times in the next 12 months.
This strong growth and value play rates in the top 5% on both metrics against all the stocks in our Stock Power universe.
Its 147% annual earnings-per-share growth rate and 40% annual sales growth rate illustrate its tremendous growth potential.
CUBI trades with a price-to-earnings ratio of 4.38 compared to the banking sector’s inflated average of 10.45. Its price-to-sales ratio stands at a reasonable 2.16 — lower than the 3.2 average of its banking peers.
Stay Tuned: Top Investment Bank
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify.
Stay tuned for the next issue, where I’ll share all the details on an investment bank stock that I’m convinced you should consider right alongside CUBI!
Matt Clark, CMSA®
Research Analyst, Money & Markets