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Is Quanta Services (PWR) Stock Undervalued 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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Quanta Services (PWR - Free Report) . PWR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 10.24, which compares to its industry's average of 13.17. PWR's Forward P/E has been as high as 11.48 and as low as 8.48, with a median of 10.59, all within the past year.

Another valuation metric that we should highlight is PWR's P/B ratio of 1.44. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. PWR's current P/B looks attractive when compared to its industry's average P/B of 1.71. Over the past year, PWR's P/B has been as high as 1.55 and as low as 1.09, with a median of 1.38.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PWR has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.6.

Finally, investors should note that PWR has a P/CF ratio of 8.77. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.81. Within the past 12 months, PWR's P/CF has been as high as 10.52 and as low as 7.26, with a median of 9.29.

These are only a few of the key metrics included in Quanta Services'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, PWR looks like an impressive value stock at the moment.


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