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Is Playa Hotels & Resorts (PLYA) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One stock to keep an eye on is Playa Hotels & Resorts (PLYA - Free Report) . PLYA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.61. This compares to its industry's average Forward P/E of 20.75. Over the past year, PLYA's Forward P/E has been as high as 1,100.43 and as low as -450.86, with a median of 23.86.

PLYA is also sporting a PEG ratio of 0.23. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PLYA's industry currently sports an average PEG of 0.56. Within the past year, PLYA's PEG has been as high as 0.51 and as low as 0.23, with a median of 0.43.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. PLYA has a P/S ratio of 1.39. This compares to its industry's average P/S of 2.79.

Finally, investors should note that PLYA has a P/CF ratio of 7.41. 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 21.57. Over the past 52 weeks, PLYA's P/CF has been as high as 14.73 and as low as -389.45, with a median of -10.07.

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


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