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Is EZCORP (EZPW) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

EZCORP (EZPW - Free Report) is a stock many investors are watching right now. EZPW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors will also notice that EZPW has a PEG ratio of 0.28. 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. EZPW's PEG compares to its industry's average PEG of 0.48. EZPW's PEG has been as high as 0.32 and as low as 0.26, with a median of 0.29, all within the past year.

Another notable valuation metric for EZPW is its P/B ratio of 0.69. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 0.77. Over the past 12 months, EZPW's P/B has been as high as 0.81 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EZPW has a P/S ratio of 0.49. This compares to its industry's average P/S of 1.35.

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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