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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.
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.
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 stock to keep an eye on is PayPal (PYPL - Free Report) . PYPL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.82. This compares to its industry's average Forward P/E of 33.64. Over the last 12 months, PYPL's Forward P/E has been as high as 15.60 and as low as 9.19, with a median of 11.64.
Investors will also notice that PYPL has a PEG ratio of 0.93. 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. PYPL's PEG compares to its industry's average PEG of 1.72. Over the last 12 months, PYPL's PEG has been as high as 1.17 and as low as 0.53, with a median of 0.72.
Another valuation metric that we should highlight is PYPL's P/B ratio of 3.05. 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 3.14. PYPL's P/B has been as high as 4.23 and as low as 2.75, with a median of 3.23, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PYPL has a P/S ratio of 2.08. This compares to its industry's average P/S of 3.24.
If you're looking for another solid Internet - Software value stock, take a look at StoneCo (STNE - Free Report) . STNE is a # 2 (Buy) stock with a Value score of A.
Shares of StoneCo currently holds a Forward P/E ratio of 8.37, and its PEG ratio is 0.32. In comparison, its industry sports average P/E and PEG ratios of 33.64 and 1.72.
STNE's Forward P/E has been as high as 20.49 and as low as 7.45, with a median of 13.54. During the same time period, its PEG ratio has been as high as 0.60, as low as 0.18, with a median of 0.29.
StoneCo sports a P/B ratio of 1.40 as well; this compares to its industry's price-to-book ratio of 3.14. In the past 52 weeks, STNE's P/B has been as high as 2.01, as low as 1.04, with a median of 1.54.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PayPal and StoneCo are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PYPL and STNE feels like a great value stock at the moment.
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Is PayPal (PYPL) Stock Undervalued Right Now?
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.
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.
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 stock to keep an eye on is PayPal (PYPL - Free Report) . PYPL is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.82. This compares to its industry's average Forward P/E of 33.64. Over the last 12 months, PYPL's Forward P/E has been as high as 15.60 and as low as 9.19, with a median of 11.64.
Investors will also notice that PYPL has a PEG ratio of 0.93. 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. PYPL's PEG compares to its industry's average PEG of 1.72. Over the last 12 months, PYPL's PEG has been as high as 1.17 and as low as 0.53, with a median of 0.72.
Another valuation metric that we should highlight is PYPL's P/B ratio of 3.05. 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 3.14. PYPL's P/B has been as high as 4.23 and as low as 2.75, with a median of 3.23, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PYPL has a P/S ratio of 2.08. This compares to its industry's average P/S of 3.24.
If you're looking for another solid Internet - Software value stock, take a look at StoneCo (STNE - Free Report) . STNE is a # 2 (Buy) stock with a Value score of A.
Shares of StoneCo currently holds a Forward P/E ratio of 8.37, and its PEG ratio is 0.32. In comparison, its industry sports average P/E and PEG ratios of 33.64 and 1.72.
STNE's Forward P/E has been as high as 20.49 and as low as 7.45, with a median of 13.54. During the same time period, its PEG ratio has been as high as 0.60, as low as 0.18, with a median of 0.29.
StoneCo sports a P/B ratio of 1.40 as well; this compares to its industry's price-to-book ratio of 3.14. In the past 52 weeks, STNE's P/B has been as high as 2.01, as low as 1.04, with a median of 1.54.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PayPal and StoneCo are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PYPL and STNE feels like a great value stock at the moment.