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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Alliance Data Systems . ADS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.21. This compares to its industry's average Forward P/E of 23.74. ADS's Forward P/E has been as high as 14.56 and as low as 8.25, with a median of 10.58, all within the past year.
Investors will also notice that ADS has a PEG ratio of 0.71. 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. ADS's PEG compares to its industry's average PEG of 1.59. Over the past 52 weeks, ADS's PEG has been as high as 1.08 and as low as 0.48, with a median of 0.79.
Another notable valuation metric for ADS is its P/B ratio of 6.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 9.38. ADS's P/B has been as high as 9.43 and as low as 5.39, with a median of 7.62, over the past year.
Finally, we should also recognize that ADS has a P/CF ratio of 8.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ADS's current P/CF looks attractive when compared to its industry's average P/CF of 25.97. Within the past 12 months, ADS's P/CF has been as high as 14.27 and as low as 8.05, with a median of 10.70.
These are just a handful of the figures considered in Alliance Data Systems'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 ADS is an impressive value stock right now.
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Is Alliance Data Systems (ADS) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Alliance Data Systems . ADS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.21. This compares to its industry's average Forward P/E of 23.74. ADS's Forward P/E has been as high as 14.56 and as low as 8.25, with a median of 10.58, all within the past year.
Investors will also notice that ADS has a PEG ratio of 0.71. 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. ADS's PEG compares to its industry's average PEG of 1.59. Over the past 52 weeks, ADS's PEG has been as high as 1.08 and as low as 0.48, with a median of 0.79.
Another notable valuation metric for ADS is its P/B ratio of 6.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 9.38. ADS's P/B has been as high as 9.43 and as low as 5.39, with a median of 7.62, over the past year.
Finally, we should also recognize that ADS has a P/CF ratio of 8.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. ADS's current P/CF looks attractive when compared to its industry's average P/CF of 25.97. Within the past 12 months, ADS's P/CF has been as high as 14.27 and as low as 8.05, with a median of 10.70.
These are just a handful of the figures considered in Alliance Data Systems'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 ADS is an impressive value stock right now.