We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is United Airlines (UAL) Stock Undervalued Right Now?
Read MoreHide Full Article
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
United Airlines (UAL - Free Report) is a stock many investors are watching right now. UAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7. This compares to its industry's average Forward P/E of 9.16. UAL's Forward P/E has been as high as 9.80 and as low as 6.70, with a median of 7.38, all within the past year.
UAL is also sporting a PEG ratio of 0.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UAL's PEG compares to its industry's average PEG of 0.65. Within the past year, UAL's PEG has been as high as 0.44 and as low as 0.30, with a median of 0.36.
Another notable valuation metric for UAL is its P/B ratio of 1.98. The P/B ratio is used to compare a stock's market value with 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 2.61. Over the past 12 months, UAL's P/B has been as high as 2.53 and as low as 1.86, with a median of 2.23.
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. UAL has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.69.
Finally, our model also underscores that UAL has a P/CF ratio of 4.48. 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 5.83. Over the past 52 weeks, UAL's P/CF has been as high as 5.60 and as low as 4.21, with a median of 4.92.
These are only a few of the key metrics included in United Airlines'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, UAL looks like an impressive value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is United Airlines (UAL) Stock Undervalued Right Now?
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
United Airlines (UAL - Free Report) is a stock many investors are watching right now. UAL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7. This compares to its industry's average Forward P/E of 9.16. UAL's Forward P/E has been as high as 9.80 and as low as 6.70, with a median of 7.38, all within the past year.
UAL is also sporting a PEG ratio of 0.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UAL's PEG compares to its industry's average PEG of 0.65. Within the past year, UAL's PEG has been as high as 0.44 and as low as 0.30, with a median of 0.36.
Another notable valuation metric for UAL is its P/B ratio of 1.98. The P/B ratio is used to compare a stock's market value with 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 2.61. Over the past 12 months, UAL's P/B has been as high as 2.53 and as low as 1.86, with a median of 2.23.
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. UAL has a P/S ratio of 0.53. This compares to its industry's average P/S of 0.69.
Finally, our model also underscores that UAL has a P/CF ratio of 4.48. 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 5.83. Over the past 52 weeks, UAL's P/CF has been as high as 5.60 and as low as 4.21, with a median of 4.92.
These are only a few of the key metrics included in United Airlines'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, UAL looks like an impressive value stock at the moment.