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Are Investors Undervaluing The Pennant Group (PNTG) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

The Pennant Group (PNTG - Free Report) is a stock many investors are watching right now. PNTG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 16.66 right now. For comparison, its industry sports an average P/E of 20.08. Over the last 12 months, PNTG's Forward P/E has been as high as 21.75 and as low as 13.48, with a median of 15.94.

Investors should also note that PNTG holds a PEG ratio of 1.28. 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. PNTG's industry has an average PEG of 2.28 right now. Within the past year, PNTG's PEG has been as high as 1.67 and as low as 1.04, with a median of 1.23.

Investors should also recognize that PNTG has a P/B ratio of 2.90. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.30. Over the past 12 months, PNTG's P/B has been as high as 3.68 and as low as 2.26, with a median of 2.73.

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. PNTG has a P/S ratio of 0.77. This compares to its industry's average P/S of 1.33.

Value investors will likely look at more than just these metrics, but the above data helps show that The Pennant Group is likely undervalued currently. And when considering the strength of its earnings outlook, PNTG sticks out at as one of the market's strongest value stocks.

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