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Is Primoris Services (PRIM) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 company to watch right now is Primoris Services (PRIM - Free Report) . PRIM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.16, which compares to its industry's average of 12.63. Over the past 52 weeks, PRIM's Forward P/E has been as high as 13.03 and as low as 8.84, with a median of 10.45.

We should also highlight that PRIM has a P/B ratio of 1.26. The P/B ratio pits a stock's market value against 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 1.77. Over the past year, PRIM's P/B has been as high as 1.85 and as low as 1.17, with a median of 1.43.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PRIM has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.48.

Finally, we should also recognize that PRIM has a P/CF ratio of 5.76. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.97. Over the past year, PRIM's P/CF has been as high as 8.37 and as low as 5.33, with a median of 6.38.

Value investors will likely look at more than just these metrics, but the above data helps show that Primoris Services is likely undervalued currently. And when considering the strength of its earnings outlook, PRIM sticks out at as one of the market's strongest value stocks.

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