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Is AerCap (AER) a Great Value Stock Right Now?

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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.

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 to watch right now is AerCap (AER - Free Report) . AER is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 6.80, which compares to its industry's average of 7.45. AER's Forward P/E has been as high as 8.80 and as low as 5.58, with a median of 8.22, all within the past year.

Investors should also note that AER holds a PEG ratio of 0.57. 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. AER's industry has an average PEG of 0.64 right now. Within the past year, AER's PEG has been as high as 1.23 and as low as 0.46, with a median of 0.69.

Investors should also recognize that AER has a P/B ratio of 0.76. 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. AER's current P/B looks attractive when compared to its industry's average P/B of 0.78. AER's P/B has been as high as 1.02 and as low as 0.61, with a median of 0.95, over the past year.

Finally, investors will want to recognize that AER has a P/CF ratio of 2.53. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 2.59. Over the past year, AER's P/CF has been as high as 3.27 and as low as 2.05, with a median of 3.07.

Value investors will likely look at more than just these metrics, but the above data helps show that AerCap is likely undervalued currently. And when considering the strength of its earnings outlook, AER sticks out at as one of the market's strongest value stocks.


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