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Should Value Investors Buy EZCORP (EZPW) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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.

One company to watch right now is EZCORP (EZPW - Free Report) . EZPW is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Investors should also note that EZPW holds a PEG ratio of 0.28. 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. EZPW's PEG compares to its industry's average PEG of 0.46. Over the past 52 weeks, EZPW's PEG has been as high as 0.32 and as low as 0.26, with a median of 0.29.

Another notable valuation metric for EZPW is its P/B ratio of 0.72. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.91. 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 0.68.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. 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 0.53. This compares to its industry's average P/S of 1.13.

These figures are just a handful of the metrics value investors tend to look at, but they help show that EZCORP is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EZPW feels like a great value stock at the moment.


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