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Is Caesars Entertainment (CZR) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 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.

Caesars Entertainment (CZR - Free Report) is a stock many investors are watching right now. CZR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another valuation metric that we should highlight is CZR's P/B ratio of 2.80. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CZR's current P/B looks attractive when compared to its industry's average P/B of 3.96. CZR's P/B has been as high as 4.50 and as low as 1.78, with a median of 2.92, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. CZR has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.24.

RCI Hospitality (RICK - Free Report) may be another strong Leisure and Recreation Services stock to add to your shortlist. RICK is a # 2 (Buy) stock with a Value grade of A.

RCI Hospitality is currently trading with a Forward P/E ratio of 14.47 while its PEG ratio sits at 1.21. Both of the company's metrics compare favorably to its industry's average P/E of 40.89 and average PEG ratio of 2.46.

Over the last 12 months, RICK's P/E has been as high as 18.45, as low as 8.83, with a median of 12.08, and its PEG ratio has been as high as 1.54, as low as 0.74, with a median of 1.01.

Furthermore, RCI Hospitality holds a P/B ratio of 3.40 and its industry's price-to-book ratio is 3.96. RICK's P/B has been as high as 3.95, as low as 1.94, with a median of 2.73 over the past 12 months.

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


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Caesars Entertainment, Inc. (CZR) - free report >>

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