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Are Investors Undervaluing Antero Resources (AR) 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.

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.

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 Antero Resources (AR - Free Report) . AR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Investors will also notice that AR has a PEG ratio of 0.99. 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. AR's PEG compares to its industry's average PEG of 1.09. Within the past year, AR's PEG has been as high as 4.82 and as low as -6.27, with a median of 0.62.

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. AR has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.45.

Finally, investors will want to recognize that AR has a P/CF ratio of 4.87. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AR's current P/CF looks attractive when compared to its industry's average P/CF of 5.11. Over the past 52 weeks, AR's P/CF has been as high as 6.35 and as low as 2.53, with a median of 5.06.

These are only a few of the key metrics included in Antero Resources'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, AR looks like an impressive value stock at the moment.


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