While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 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.
Euronet Worldwide (EEFT) is a stock many investors are watching right now. EEFT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 10.17, while its industry has an average P/E of 21.61. Over the past 52 weeks, EEFT's Forward P/E has been as high as 11.98 and as low as 8.61, with a median of 10.53.
Investors should also note that EEFT holds a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EEFT's industry has an average PEG of 1.27 right now. EEFT's PEG has been as high as 0.86 and as low as 0.57, with a median of 0.71, all within the past year.
Another notable valuation metric for EEFT is its P/B ratio of 3.54. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.71. Over the past year, EEFT's P/B has been as high as 4.10 and as low as 2.90, with a median of 3.54.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EEFT has a P/S ratio of 1.13. This compares to its industry's average P/S of 2.07.
Finally, investors should note that EEFT has a P/CF ratio of 10.86. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. EEFT's P/CF compares to its industry's average P/CF of 22.51. Over the past year, EEFT's P/CF has been as high as 12.61 and as low as 8.91, with a median of 10.74.
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 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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