Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
EZCORP (EZPW) is a stock many investors are watching right now. EZPW is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EZPW has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.52.
Finally, our model also underscores that EZPW has a P/CF ratio of 9.76. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. EZPW's current P/CF looks attractive when compared to its industry's average P/CF of 27.40. EZPW's P/CF has been as high as 11.01 and as low as 7.77, with a median of 8.80, all within the past year.
These are only a few of the key metrics included in EZCORP'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, EZPW looks like an impressive value stock at the moment.
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EZCORP, Inc. (EZPW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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