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Should Value Investors Buy Quanta Services (PWR) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is Quanta Services (PWR - Free Report) . PWR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.23, while its industry has an average P/E of 13.22. Over the past year, PWR's Forward P/E has been as high as 12.90 and as low as 8.48, with a median of 10.90.

We should also highlight that PWR has a P/B ratio of 1.57. 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 solid versus its industry's average P/B of 1.88. Over the past year, PWR's P/B has been as high as 1.58 and as low as 1.09, with a median of 1.39.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PWR has a P/S ratio of 0.51. This compares to its industry's average P/S of 0.64.

Finally, we should also recognize that PWR has a P/CF ratio of 11.15. 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. This stock's P/CF looks attractive against its industry's average P/CF of 14.50. Within the past 12 months, PWR's P/CF has been as high as 11.26 and as low as 7.26, with a median of 9.63.

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


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