EQB Undervalued After Major Selloff

EQB (EQ Bank) stock is down around 7% after earnings. A quick DCF calculation resulted in a $117 per share fair value estimation with a potential future return of 16.87% over the next 5 years. DCF calculation assumptions are listed below:

12% Year over year (YoY) EPS growth
Conservative future PE ratio of 10, lower than other Canadian bank peers such as CIBC (ticker CM) and Royal Bank of Canada (ticker RY)
Discount rate of 10%

In addition to the above valuation, all key metrics I care about are moving in the right direction, I've listed the metrics I consider most important below:

Revenue up 27% YoY (>10% preferred)
EPS up 12% YoY (>10% required)
Book value per share up 14% YoY (>10% preferred)
Minimal share based compensation, less than 1% of net income
ROE of 15% (> 14% required)
Conservatively capitalized: CET1 ratio of 14.2% (>10% required)
Dividends up 20% YoY
Decumulation loan assets grow by 55% YoY to 1.6 Billion, an amazing growth engine for the company that I like

In conclusion, I believe the company is undervalued, but considering EQB is already an overweight position in my portfolio, I will not actively add more to the position unless the stock price drops further. I will continue passively investing into the company through monthly

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DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.