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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
Euronet Worldwide (EEFT) is a stock many investors are watching right now. EEFT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.11 right now. For comparison, its industry sports an average P/E of 14. EEFT's Forward P/E has been as high as 12.90 and as low as 8.61, with a median of 10.76, all within the past year.
Investors will also notice that EEFT has a PEG ratio of 0.61. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EEFT's PEG compares to its industry's average PEG of 0.88. EEFT's PEG has been as high as 0.86 and as low as 0.57, with a median of 0.72, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EEFT has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.57.
Finally, we should also recognize that EEFT has a P/CF ratio of 9.86. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. EEFT's current P/CF looks attractive when compared to its industry's average P/CF of 13.54. Over the past 52 weeks, EEFT's P/CF has been as high as 13.51 and as low as 9.31, with a median of 11.26.
Value investors will likely look at more than just these metrics, but the above data helps show that Euronet Worldwide is likely undervalued currently. And when considering the strength of its earnings outlook, EEFT sticks out at as one of the market's strongest value stocks.
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Euronet Worldwide, Inc. (EEFT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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