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Are Investors Undervaluing Liberty Energy (LBRT) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Liberty Energy (LBRT - Free Report) . LBRT is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.44, while its industry has an average P/E of 13.32. Over the past year, LBRT's Forward P/E has been as high as 7.91 and as low as 3.32, with a median of 4.80.

Another valuation metric that we should highlight is LBRT's P/B ratio of 1.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. LBRT's current P/B looks attractive when compared to its industry's average P/B of 2.52. LBRT's P/B has been as high as 2.25 and as low as 1.29, with a median of 1.70, over the past year.

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. LBRT has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.71.

Finally, investors will want to recognize that LBRT has a P/CF ratio of 3.39. 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. LBRT's current P/CF looks attractive when compared to its industry's average P/CF of 8.90. Over the past year, LBRT's P/CF has been as high as 6.62 and as low as 2.33, with a median of 3.22.

These are just a handful of the figures considered in Liberty Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LBRT is an impressive value stock right now.


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