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Is Universal Health Services (UHS) 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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Universal Health Services (UHS - Free Report) . UHS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.36, while its industry has an average P/E of 15.04. Over the past 52 weeks, UHS's Forward P/E has been as high as 15.12 and as low as 10.83, with a median of 12.43.

We also note that UHS holds a PEG ratio of 1.38. 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. UHS's industry has an average PEG of 1.64 right now. Over the last 12 months, UHS's PEG has been as high as 4.77 and as low as 1.13, with a median of 1.38.

These are only a few of the key metrics included in Universal Health Services'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, UHS looks like an impressive value stock at the moment.


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