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Should Value Investors Buy Beazer Homes (BZH) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Beazer Homes (BZH - Free Report) is a stock many investors are watching right now. BZH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 7.37, while its industry has an average P/E of 10.88. Over the past year, BZH's Forward P/E has been as high as 13.09 and as low as 2.31, with a median of 8.24.

We should also highlight that BZH has a P/B ratio of 0.77. Investors use the P/B ratio to look at a stock's market value versus 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 1.27. Within the past 52 weeks, BZH's P/B has been as high as 1 and as low as 0.26, with a median of 0.68.

Finally, investors should note that BZH has a P/CF ratio of 6.55. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. BZH's current P/CF looks attractive when compared to its industry's average P/CF of 8.76. Over the past year, BZH's P/CF has been as high as 8.41 and as low as -7.55, with a median of 5.84.

These are only a few of the key metrics included in Beazer Homes's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BZH looks like an impressive value stock at the moment.


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