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Is AerCap (AER) 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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 AerCap (AER - Free Report) . AER is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.70. This compares to its industry's average Forward P/E of 9.40. AER's Forward P/E has been as high as 8.80 and as low as 7.27, with a median of 8.15, all within the past year.

Investors will also notice that AER has a PEG ratio of 1.23. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AER's industry currently sports an average PEG of 1.26. Within the past year, AER's PEG has been as high as 1.23 and as low as 0.62, with a median of 0.69.

Finally, our model also underscores that AER has a P/CF ratio of 3.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. AER's current P/CF looks attractive when compared to its industry's average P/CF of 3.26. AER's P/CF has been as high as 3.27 and as low as 2.88, with a median of 3.10, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that AerCap is likely undervalued currently. And when considering the strength of its earnings outlook, AER sticks out at as one of the market's strongest value stocks.


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