Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Cardtronics PLC stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Cardtronics has a trailing twelve months PE ratio of 15.10. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.38.
If we focus on the long-term trend of the stock the current level puts Cardtronics’ current PE among its lower zone, below its median for the term (which stands at 17.86). Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE also compares widely favorably with the Zacks classified Financial Transaction Services industry’s trailing twelve months PE ratio, which stands at 25.83. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers. In fact, since the beginning of 2014, Cardtronics has been consistently trading cheaper than the industry in terms of PE.
We should also point out that Cardtronics has a forward PE ratio (price relative to this year’s earnings) of 17.69, higher than the current figure. Delving deeper into the PE’s inputs we observed that the company’s earnings are expected to see a slight dip in 2017, which would serve to inflate the PE ratio. 2017 is expected to be a year of transition for the company goes through hiccups like the 7-Eleven de-conversion, EMV (Europay, Mastercard, Visa) software upgrade related expenses, higher capital expenditure and integration problems associated with its DC Payments acquisition. However, earnings are expected to continue following their previous growth trajectory 2018 onwards and into the long-term.
Also, while the Forward PE is higher than the current level, the company is still expected to remain relatively undervalued to its peers as well as the broader market.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Cardtronics has a P/S ratio of about 1.60. This is significantly lower than the Zacks categorized Financial Transaction Services industry average, which comes in at a whopping 10.51 right now. Also, this is well below the highs for this stock in particular over the past few years.
This clearly suggests some level of undervalued trading for CATM—at least compared to historical norms.
Broad Value Outlook
In aggregate, Cardtronics currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Cardtronics a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at just 6.12, which is far better than the industry average of 14.47. Additionally, its P/B ratio (used to compare a stock's market value to its book value) stands at 4.55, slightly lower than the industry average of 4.64. Clearly, CATM is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Cardtronics might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives CATM a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Cardtronics seems to have pretty striking prospects.
However, the company’s recent earnings estimates have been going down lately. The current quarter has seen three estimates go lower in the past thirty days compared to none higher, while the full year estimate has seen four downward revisions and no upward revisions in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has fallen by 28.8% in the past month, while the full year estimate has inched lower by 11.8%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Cardtronics PLC Price and Consensus
However, analysts expect earnings to rebound and grow 2018 onwards. This is why the consensus estimate trend for 2018’s earnings has seen a boost over the past month. The company has witnessed two upward revisions and one downward revisions over the same time frame, leading to a nearly 4% growth in the earnings estimate.
The combination of these somewhat mixed factors is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term and outperformance over the long-term.
Bottom Line
Cardtronics is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. It boasts of a favorable industry rank (Top 25% out of more than 250 industries), but a Zacks Rank #3 for the company somewhat dims the sparkle.
Notably, the Financial Transaction Services industry has outperformed the broader market over the last two years, as you can see below:
Despite lingering uncertainties in the near-term, we believe that Cardtronics is well positioned to benefit from global outsourcing trends, as well as consistently boost its ATM base and revenue per ATM through various value-added products and services, over the long-term. This indicates that the company remains a strong value proposition.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>
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Does Cardtronics (CATM) Make for a Suitable Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Cardtronics PLC stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Cardtronics has a trailing twelve months PE ratio of 15.10. This level compares pretty favorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.38.
If we focus on the long-term trend of the stock the current level puts Cardtronics’ current PE among its lower zone, below its median for the term (which stands at 17.86). Hence, we could infer that the stock is undervalued in this respect, especially in light of its historical trend. Thus, the present level seems to be a suitable entry point for the stock from a PE perspective.
Further, the stock’s PE also compares widely favorably with the Zacks classified Financial Transaction Services industry’s trailing twelve months PE ratio, which stands at 25.83. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers. In fact, since the beginning of 2014, Cardtronics has been consistently trading cheaper than the industry in terms of PE.
We should also point out that Cardtronics has a forward PE ratio (price relative to this year’s earnings) of 17.69, higher than the current figure. Delving deeper into the PE’s inputs we observed that the company’s earnings are expected to see a slight dip in 2017, which would serve to inflate the PE ratio. 2017 is expected to be a year of transition for the company goes through hiccups like the 7-Eleven de-conversion, EMV (Europay, Mastercard, Visa) software upgrade related expenses, higher capital expenditure and integration problems associated with its DC Payments acquisition. However, earnings are expected to continue following their previous growth trajectory 2018 onwards and into the long-term.
Also, while the Forward PE is higher than the current level, the company is still expected to remain relatively undervalued to its peers as well as the broader market.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Cardtronics has a P/S ratio of about 1.60. This is significantly lower than the Zacks categorized Financial Transaction Services industry average, which comes in at a whopping 10.51 right now. Also, this is well below the highs for this stock in particular over the past few years.
This clearly suggests some level of undervalued trading for CATM—at least compared to historical norms.
Broad Value Outlook
In aggregate, Cardtronics currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Cardtronics a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at just 6.12, which is far better than the industry average of 14.47. Additionally, its P/B ratio (used to compare a stock's market value to its book value) stands at 4.55, slightly lower than the industry average of 4.64. Clearly, CATM is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Cardtronics might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. This gives CATM a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Cardtronics seems to have pretty striking prospects.
However, the company’s recent earnings estimates have been going down lately. The current quarter has seen three estimates go lower in the past thirty days compared to none higher, while the full year estimate has seen four downward revisions and no upward revisions in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has fallen by 28.8% in the past month, while the full year estimate has inched lower by 11.8%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Cardtronics PLC Price and Consensus
Cardtronics PLC Price and Consensus | Cardtronics PLC Quote
However, analysts expect earnings to rebound and grow 2018 onwards. This is why the consensus estimate trend for 2018’s earnings has seen a boost over the past month. The company has witnessed two upward revisions and one downward revisions over the same time frame, leading to a nearly 4% growth in the earnings estimate.
The combination of these somewhat mixed factors is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term and outperformance over the long-term.
Bottom Line
Cardtronics is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. It boasts of a favorable industry rank (Top 25% out of more than 250 industries), but a Zacks Rank #3 for the company somewhat dims the sparkle.
Notably, the Financial Transaction Services industry has outperformed the broader market over the last two years, as you can see below:
Despite lingering uncertainties in the near-term, we believe that Cardtronics is well positioned to benefit from global outsourcing trends, as well as consistently boost its ATM base and revenue per ATM through various value-added products and services, over the long-term. This indicates that the company remains a strong value proposition.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>