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Should Value Investors Buy EZCORP (EZPW) Stock?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

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

Investors should also note that EZPW holds 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 0.49. Over the last 12 months, EZPW's PEG has been as high as 0.29 and as low as 0.26, with a median of 0.28.

Investors should also recognize that EZPW has a P/B ratio of 0.74. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. EZPW's current P/B looks attractive when compared to its industry's average P/B of 0.96. Within the past 52 weeks, EZPW's P/B has been as high as 0.83 and as low as 0.57, with a median of 0.70.

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 0.52. This compares to its industry's average P/S of 1.28.

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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