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Is United Rentals (URI) 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.

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.

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 United Rentals (URI - Free Report) . URI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.65. This compares to its industry's average Forward P/E of 12.86. Over the last 12 months, URI's Forward P/E has been as high as 15.80 and as low as 7.49, with a median of 12.14.

URI is also sporting a PEG ratio of 0.55. 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. URI's industry has an average PEG of 0.63 right now. Within the past year, URI's PEG has been as high as 0.98 and as low as 0.43, with a median of 0.70.

Finally, our model also underscores that URI has a P/CF ratio of 5.77. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.40. Over the past year, URI's P/CF has been as high as 9.09 and as low as 4.44, with a median of 7.13.

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


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