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Is Aaron's (AAN) Stock Undervalued Right Now?

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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.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is Aaron's (AAN - Free Report) . AAN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Another notable valuation metric for AAN is its P/B ratio of 2.29. The P/B is a method of comparing a stock's market value to 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 3.60. Over the past year, AAN's P/B has been as high as 2.29 and as low as 1.54, with a median of 1.95.

Finally, investors will want to recognize that AAN has a P/CF ratio of 2. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AAN's current P/CF looks attractive when compared to its industry's average P/CF of 6.08. Over the past year, AAN's P/CF has been as high as 2 and as low as 1.34, with a median of 1.73.

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


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