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Is Hanger (HNGR) 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.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Hanger (HNGR - Free Report) is a stock many investors are watching right now. HNGR is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 18.33, which compares to its industry's average of 24.86. Over the past 52 weeks, HNGR's Forward P/E has been as high as 126.02 and as low as 11.01, with a median of 24.29.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. HNGR has a P/S ratio of 0.83. This compares to its industry's average P/S of 1.77.

Finally, investors should note that HNGR has a P/CF ratio of 16.75. 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. HNGR's current P/CF looks attractive when compared to its industry's average P/CF of 26.35. Within the past 12 months, HNGR's P/CF has been as high as 18.44 and as low as 6.84, with a median of 13.55.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Hanger is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HNGR feels like a great value stock at the moment.


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