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Are Investors Undervaluing Playa Hotels & Resorts (PLYA) Right Now?

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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 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.

Playa Hotels & Resorts (PLYA - Free Report) is a stock many investors are watching right now. PLYA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.63, while its industry has an average P/E of 20.82. Over the past 52 weeks, PLYA's Forward P/E has been as high as 1,100.43 and as low as -450.86, with a median of 23.86.

PLYA is also sporting a PEG ratio of 0.23. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PLYA's PEG compares to its industry's average PEG of 0.56. Over the last 12 months, PLYA's PEG has been as high as 0.51 and as low as 0.23, with a median of 0.43.

Value investors also use the P/S ratio. The P/S ratio is 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. PLYA has a P/S ratio of 1.31. This compares to its industry's average P/S of 2.38.

Finally, our model also underscores that PLYA has a P/CF ratio of 7.51. 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. PLYA's P/CF compares to its industry's average P/CF of 21.91. Over the past 52 weeks, PLYA's P/CF has been as high as 14.73 and as low as -389.45, with a median of -10.07.

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


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