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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Enova International (ENVA) is a stock many investors are watching right now. ENVA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 8.03. This compares to its industry's average Forward P/E of 8.92. Over the last 12 months, ENVA's Forward P/E has been as high as 10.85 and as low as 6.47, with a median of 8.42.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ENVA has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.33.
Value investors will likely look at more than just these metrics, but the above data helps show that Enova International is likely undervalued currently. And when considering the strength of its earnings outlook, ENVA sticks out at as one of the market's strongest value stocks.
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Enova International, Inc. (ENVA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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