Back to top

Image: Bigstock

Is eBay (EBAY) a Great Value Stock Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 eBay (EBAY - Free Report) . EBAY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 13.81. This compares to its industry's average Forward P/E of 40.29. Over the past year, EBAY's Forward P/E has been as high as 15.52 and as low as 10.08, with a median of 13.24.

Investors will also notice that EBAY has a PEG ratio of 1.46. 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. EBAY's industry currently sports an average PEG of 1.86. Within the past year, EBAY's PEG has been as high as 1.49 and as low as 1.01, with a median of 1.38.

Investors should also recognize that EBAY has a P/B ratio of 6.66. 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 solid versus its industry's average P/B of 6.92. EBAY's P/B has been as high as 6.75 and as low as 3.63, with a median of 4.81, over the past year.

Finally, we should also recognize that EBAY has a P/CF ratio of 10.85. 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. EBAY's current P/CF looks attractive when compared to its industry's average P/CF of 32.27. Over the past 52 weeks, EBAY's P/CF has been as high as 11.07 and as low as -242.33, with a median of 9.

These are just a handful of the figures considered in eBay's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EBAY is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


eBay Inc. (EBAY) - free report >>

Published in