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Should Value Investors Buy EZCORP (EZPW) Stock?

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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, 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.

EZCORP (EZPW - Free Report) is a stock many investors are watching right now. EZPW is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors will also notice that EZPW has a PEG ratio of 0.28. 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. EZPW's PEG compares to its industry's average PEG of 0.68. Over the last 12 months, EZPW's PEG has been as high as 0.34 and as low as 0.26, with a median of 0.29.

Another valuation metric that we should highlight is EZPW's P/B ratio of 0.78. 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. This stock's P/B looks attractive against its industry's average P/B of 0.95. Within the past 52 weeks, EZPW's P/B has been as high as 0.78 and as low as 0.57, with a median of 0.65.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EZPW has a P/S ratio of 0.54. This compares to its industry's average P/S of 1.3.

These are only a few of the key metrics included in EZCORP'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, EZPW looks like an impressive value stock at the moment.


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