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Are Investors Undervaluing EZCORP (EZPW) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is EZCORP (EZPW - Free Report) . EZPW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

EZPW is also sporting a PEG ratio of 0.28. 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. EZPW's PEG compares to its industry's average PEG of 0.76. EZPW's PEG has been as high as 0.42 and as low as 0.26, with a median of 0.31, all within the past year.

We should also highlight that EZPW has a P/B ratio of 0.59. 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. EZPW's current P/B looks attractive when compared to its industry's average P/B of 0.65. Over the past year, EZPW's P/B has been as high as 0.86 and as low as 0.58, with a median of 0.68.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EZPW has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.99.

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


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