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Are Investors Undervaluing Lions Gate Entertainment (LGF.A) 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Lions Gate Entertainment (LGF.A - Free Report) . LGF.A is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.66, which compares to its industry's average of 26.49. LGF.A's Forward P/E has been as high as 901.57 and as low as 9.98, with a median of 15.06, all within the past year.

We also note that LGF.A holds a PEG ratio of 1.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LGF.A's industry currently sports an average PEG of 1.61. Over the last 12 months, LGF.A's PEG has been as high as 60.11 and as low as 0.91, with a median of 1.24.

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. LGF.A has a P/S ratio of 0.63. This compares to its industry's average P/S of 1.35.

These are just a handful of the figures considered in Lions Gate Entertainment'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 LGF.A is an impressive value stock right now.


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