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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, 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Playa Hotels & Resorts (PLYA - Free Report) is a stock many investors are watching right now. PLYA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.72, which compares to its industry's average of 19.38. Over the last 12 months, PLYA's Forward P/E has been as high as 19.60 and as low as 9.13, with a median of 15.11.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PLYA has a P/S ratio of 1.51. This compares to its industry's average P/S of 2.41.

Finally, investors should note that PLYA has a P/CF ratio of 10.25. 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. PLYA's P/CF compares to its industry's average P/CF of 17.52. Over the past 52 weeks, PLYA's P/CF has been as high as 11.88 and as low as 5.82, with a median of 8.06.

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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