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Is Meritage Homes (MTH) Stock Undervalued Right Now?
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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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Meritage Homes (MTH - Free Report) . MTH 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 4.89, which compares to its industry's average of 7.10. Over the past 52 weeks, MTH's Forward P/E has been as high as 11.07 and as low as 4.82, with a median of 6.85.
We also note that MTH holds a PEG ratio of 0.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MTH's PEG compares to its industry's average PEG of 0.66. MTH's PEG has been as high as 0.83 and as low as 0.24, with a median of 0.45, all within the past year.
Investors should also recognize that MTH has a P/B ratio of 1.46. 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 stock's P/B looks solid versus its industry's average P/B of 1.53. MTH's P/B has been as high as 1.97 and as low as 1.26, with a median of 1.48, over the past year.
Finally, investors will want to recognize that MTH has a P/CF ratio of 6.62. 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. MTH's P/CF compares to its industry's average P/CF of 7.95. MTH's P/CF has been as high as 11.28 and as low as 5.74, with a median of 7.35, all within the past year.
These are just a handful of the figures considered in Meritage 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 MTH is an impressive value stock right now.
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Is Meritage Homes (MTH) Stock Undervalued Right Now?
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Meritage Homes (MTH - Free Report) . MTH 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 4.89, which compares to its industry's average of 7.10. Over the past 52 weeks, MTH's Forward P/E has been as high as 11.07 and as low as 4.82, with a median of 6.85.
We also note that MTH holds a PEG ratio of 0.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MTH's PEG compares to its industry's average PEG of 0.66. MTH's PEG has been as high as 0.83 and as low as 0.24, with a median of 0.45, all within the past year.
Investors should also recognize that MTH has a P/B ratio of 1.46. 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 stock's P/B looks solid versus its industry's average P/B of 1.53. MTH's P/B has been as high as 1.97 and as low as 1.26, with a median of 1.48, over the past year.
Finally, investors will want to recognize that MTH has a P/CF ratio of 6.62. 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. MTH's P/CF compares to its industry's average P/CF of 7.95. MTH's P/CF has been as high as 11.28 and as low as 5.74, with a median of 7.35, all within the past year.
These are just a handful of the figures considered in Meritage 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 MTH is an impressive value stock right now.