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Is United Rentals (URI) Stock Undervalued Right Now?

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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 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.

One company value investors might notice is United Rentals (URI - Free Report) . URI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.70, which compares to its industry's average of 11.89. Over the past 52 weeks, URI's Forward P/E has been as high as 15.80 and as low as 7.49, with a median of 9.92.

URI is also sporting a PEG ratio of 0.53. 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. URI's PEG compares to its industry's average PEG of 1.45. Over the last 12 months, URI's PEG has been as high as 0.92 and as low as 0.43, with a median of 0.56.

Finally, our model also underscores that URI has a P/CF ratio of 5.89. 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 14.56. Over the past 52 weeks, URI's P/CF has been as high as 8.82 and as low as 4.44, with a median of 6.08.

These are only a few of the key metrics included in United Rentals'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, URI looks like an impressive value stock at the moment.


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