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Should Value Investors Buy Beazer Homes USA (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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Beazer Homes USA (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 is trading with a P/E ratio of 5.20, which compares to its industry's average of 9.78. Over the past year, BZH's Forward P/E has been as high as 5.53 and as low as 1.61, with a median of 3.48.
Investors should also recognize that BZH has a P/B ratio of 0.68. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.29. Within the past 52 weeks, BZH's P/B has been as high as 0.68 and as low as 0.32, with a median of 0.48.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BZH has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.71.
Finally, our model also underscores that BZH has a P/CF ratio of 3.10. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.90. Over the past year, BZH's P/CF has been as high as 3.12 and as low as 1.27, with a median of 2.05.
Investors could also keep in mind Toll Brothers (TOL - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Shares of Toll Brothers currently holds a Forward P/E ratio of 7.11, and its PEG ratio is 0.65. In comparison, its industry sports average P/E and PEG ratios of 9.78 and 0.78.
Over the last 12 months, TOL's P/E has been as high as 8.19, as low as 3.80, with a median of 6.32, and its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.69.
Additionally, Toll Brothers has a P/B ratio of 1.23 while its industry's price-to-book ratio sits at 1.29. For TOL, this valuation metric has been as high as 1.23, as low as 0.78, with a median of 1.02 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Beazer Homes USA and Toll Brothers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BZH and TOL feels like a great value stock at the moment.
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Should Value Investors Buy Beazer Homes USA (BZH) Stock?
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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Beazer Homes USA (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 is trading with a P/E ratio of 5.20, which compares to its industry's average of 9.78. Over the past year, BZH's Forward P/E has been as high as 5.53 and as low as 1.61, with a median of 3.48.
Investors should also recognize that BZH has a P/B ratio of 0.68. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.29. Within the past 52 weeks, BZH's P/B has been as high as 0.68 and as low as 0.32, with a median of 0.48.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BZH has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.71.
Finally, our model also underscores that BZH has a P/CF ratio of 3.10. 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. This stock's P/CF looks attractive against its industry's average P/CF of 5.90. Over the past year, BZH's P/CF has been as high as 3.12 and as low as 1.27, with a median of 2.05.
Investors could also keep in mind Toll Brothers (TOL - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Shares of Toll Brothers currently holds a Forward P/E ratio of 7.11, and its PEG ratio is 0.65. In comparison, its industry sports average P/E and PEG ratios of 9.78 and 0.78.
Over the last 12 months, TOL's P/E has been as high as 8.19, as low as 3.80, with a median of 6.32, and its PEG ratio has been as high as 0.90, as low as 0.34, with a median of 0.69.
Additionally, Toll Brothers has a P/B ratio of 1.23 while its industry's price-to-book ratio sits at 1.29. For TOL, this valuation metric has been as high as 1.23, as low as 0.78, with a median of 1.02 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Beazer Homes USA and Toll Brothers are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BZH and TOL feels like a great value stock at the moment.