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Should Value Investors Buy Allegiant Travel (ALGT) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Allegiant Travel (ALGT - Free Report) . ALGT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.84 right now. For comparison, its industry sports an average P/E of 8.85. Over the last 12 months, ALGT's Forward P/E has been as high as 18.02 and as low as 8.84, with a median of 11.94.

Investors will also notice that ALGT has a PEG ratio of 0.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALGT's PEG compares to its industry's average PEG of 0.74. Over the past 52 weeks, ALGT's PEG has been as high as 2.44 and as low as 0.35, with a median of 0.45.

Finally, we should also recognize that ALGT has a P/CF ratio of 5.15. 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. ALGT's P/CF compares to its industry's average P/CF of 5.45. Over the past 52 weeks, ALGT's P/CF has been as high as 9.14 and as low as 5.15, with a median of 6.92.

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




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