The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Lyft (LYFT). LYFT is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 16.74. This compares to its industry's average Forward P/E of 29.51. Over the past year, LYFT's Forward P/E has been as high as 19.33 and as low as 8.92, with a median of 12.75.
Investors should also note that LYFT holds a PEG ratio of 0.90. 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. LYFT's PEG compares to its industry's average PEG of 1.76. LYFT's PEG has been as high as 0.91 and as low as 0.27, with a median of 0.39, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LYFT has a P/S ratio of 1.09. This compares to its industry's average P/S of 1.51.
These are just a handful of the figures considered in Lyft's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LYFT is an impressive value stock right now.
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Lyft, Inc. (LYFT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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