Should Value Investors Buy Aveanna Healthcare (AVAH) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

Aveanna Healthcare (AVAH) is a stock many investors are watching right now. AVAH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.55, which compares to its industry's average of 18.37. Over the past year, AVAH's Forward P/E has been as high as 296.02 and as low as -1,528.95, with a median of 46.39.

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. AVAH has a P/S ratio of 0.81. This compares to its industry's average P/S of 1.57.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Aveanna Healthcare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AVAH feels like a great value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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