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Is Hilton Grand Vacations (HGV) 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.

Hilton Grand Vacations (HGV - Free Report) is a stock many investors are watching right now. HGV is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.84, while its industry has an average P/E of 22.60. Over the past year, HGV's Forward P/E has been as high as 12.63 and as low as 7.81, with a median of 10.32.

We also note that HGV holds a PEG ratio of 1.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HGV's PEG compares to its industry's average PEG of 1.81. Over the last 12 months, HGV's PEG has been as high as 1.48 and as low as 0.42, with a median of 0.57.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HGV has a P/S ratio of 1.13. This compares to its industry's average P/S of 1.63.

Finally, investors should note that HGV has a P/CF ratio of 7.82. 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. HGV's current P/CF looks attractive when compared to its industry's average P/CF of 18.16. Within the past 12 months, HGV's P/CF has been as high as 8.99 and as low as 6.37, with a median of 7.75.

These are only a few of the key metrics included in Hilton Grand Vacations's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HGV looks like an impressive value stock at the moment.


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