Should Value Investors Buy Beazer Homes (BZH) Stock?

BZH

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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Beazer Homes (BZH - Free Report) is a stock many investors are watching right now. BZH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.74, which compares to its industry's average of 11.48. BZH's Forward P/E has been as high as 13.09 and as low as 2.31, with a median of 8.39, all within the past year.

Another notable valuation metric for BZH is its P/B ratio of 0.96. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.27. Over the past 12 months, BZH's P/B has been as high as 1.06 and as low as 0.26, with a median of 0.68.

Finally, our model also underscores that BZH has a P/CF ratio of 8.06. 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. BZH's current P/CF looks attractive when compared to its industry's average P/CF of 8.76. Within the past 12 months, BZH's P/CF has been as high as 8.87 and as low as -7.55, with a median of 6.35.

These are just a handful of the figures considered in Beazer Homes'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 BZH is an impressive value stock right now.

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