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Are Investors Undervaluing Greenbrier Companies (GBX) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Greenbrier Companies (GBX - Free Report) . GBX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.22, while its industry has an average P/E of 11.99. Over the past year, GBX's Forward P/E has been as high as 15.76 and as low as 9.97, with a median of 12.73.

GBX is also sporting a PEG ratio of 1.08. 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. GBX's industry has an average PEG of 1.18 right now. Within the past year, GBX's PEG has been as high as 1.66 and as low as 1.05, with a median of 1.34.

Another notable valuation metric for GBX is its P/B ratio of 1.05. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.35. Within the past 52 weeks, GBX's P/B has been as high as 1.50 and as low as 1.01, with a median of 1.22.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GBX has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.12.

These are only a few of the key metrics included in Greenbrier Companies'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, GBX looks like an impressive value stock at the moment.


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