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Should Value Investors Consider EZCORP (EZPW) Stock?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put EZCORP, Inc. (EZPW - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, EZCORP has a trailing twelve months PE ratio of 19.92, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 21.54. While EZCORP’s current PE level puts it above its midpoint of 7.82 over the past five years, the current level stands well below the highs for the stock, suggesting great scope for entry.
However, the stock’s PE stands higher than the Zacks Finance sector’s trailing twelve months PE ratio, which is currently pegged at 16.94. This indicates that the stock is overvalued right now, compared to its peers.
We should also point out that EZCORP has a forward PE ratio (price relative to this year’s earnings) of just 15.73, so it is fair to say that a slightly more value-oriented path may be ahead for EZCORP stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, EZCORP has a P/S ratio of about 0.88. This is considerably lower than the S&P 500 average, which comes in at 3.41 right now. Also, as we can see in the chart below, this stands below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, EZCORP currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes EZCORP a solid choice for value investors.
What About the Stock Overall?
Though EZCORP might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of D. This gives EZPW a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have somewhat encouraging. While current quarter has not witnessed any estimate revisions in the past 60 days, the full year estimate has seen two upward with no downward revisions in the same time period.
This has had a slightly positive impact on the consensus estimate, as the full year consensus estimate has risen by 11.3% in the past two months, while the current quarter estimate has remained unchanged. You can see the consensus estimate trend and recent price action for the stock in the chart below:
However, this somewhat bullish trend has likely not yet been reflected in the stock, as we have just a Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. Nonetheless, the positive analyst sentiment hints at favorable near-term prospects.
Bottom Line
EZCORP is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish Zacks Industry Rank (among Bottom 24% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader industry factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Should Value Investors Consider EZCORP (EZPW) Stock?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
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One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put EZCORP, Inc. (EZPW - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, EZCORP has a trailing twelve months PE ratio of 19.92, as you can see in the chart below:
This level actually compares favorably with the market at large, as the PE for the S&P 500 stands at about 21.54. While EZCORP’s current PE level puts it above its midpoint of 7.82 over the past five years, the current level stands well below the highs for the stock, suggesting great scope for entry.
However, the stock’s PE stands higher than the Zacks Finance sector’s trailing twelve months PE ratio, which is currently pegged at 16.94. This indicates that the stock is overvalued right now, compared to its peers.
We should also point out that EZCORP has a forward PE ratio (price relative to this year’s earnings) of just 15.73, so it is fair to say that a slightly more value-oriented path may be ahead for EZCORP stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, EZCORP has a P/S ratio of about 0.88. This is considerably lower than the S&P 500 average, which comes in at 3.41 right now. Also, as we can see in the chart below, this stands below the highs for this stock in particular over the past few years.
Broad Value Outlook
In aggregate, EZCORP currently has a Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes EZCORP a solid choice for value investors.
What About the Stock Overall?
Though EZCORP might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of D. This gives EZPW a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have somewhat encouraging. While current quarter has not witnessed any estimate revisions in the past 60 days, the full year estimate has seen two upward with no downward revisions in the same time period.
This has had a slightly positive impact on the consensus estimate, as the full year consensus estimate has risen by 11.3% in the past two months, while the current quarter estimate has remained unchanged. You can see the consensus estimate trend and recent price action for the stock in the chart below:
EZCORP, Inc. Price and Consensus
EZCORP, Inc. Price and Consensus | EZCORP, Inc. Quote
However, this somewhat bullish trend has likely not yet been reflected in the stock, as we have just a Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. Nonetheless, the positive analyst sentiment hints at favorable near-term prospects.
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Bottom Line
EZCORP is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a sluggish Zacks Industry Rank (among Bottom 24% of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall. In fact, over the past two years, the industry has clearly underperformed the broader market, as you can see below:
So, value investors might want to wait for the broader industry factors to turn around in this name first, but once that happens, this stock could be a compelling pick.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>