While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Array Technologies (ARRY) is a stock many investors are watching right now. ARRY is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.99 right now. For comparison, its industry sports an average P/E of 16.14. Over the past 52 weeks, ARRY's Forward P/E has been as high as 12.17 and as low as 5.23, with a median of 7.84.
Investors should also note that ARRY holds a PEG ratio of 0.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ARRY's PEG compares to its industry's average PEG of 0.72. Over the past 52 weeks, ARRY's PEG has been as high as 1.22 and as low as 0.28, with a median of 0.67.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ARRY has a P/S ratio of 1. This compares to its industry's average P/S of 1.23.
These are only a few of the key metrics included in Array Technologies's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ARRY looks like an impressive value stock at the moment.
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Array Technologies, Inc. (ARRY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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