Back to top

Image: Bigstock

Is Navistar (NAV) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Navistar (NAV - Free Report) is a stock many investors are watching right now. NAV is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.64 right now. For comparison, its industry sports an average P/E of 11.64. Over the past year, NAV's Forward P/E has been as high as 13.92 and as low as 6.33, with a median of 9.33.

NAV is also sporting a PEG ratio of 0.56. 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. NAV's PEG compares to its industry's average PEG of 1.28. NAV's PEG has been as high as 2.78 and as low as 0.54, with a median of 1.64, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NAV has a P/S ratio of 0.28. This compares to its industry's average P/S of 0.47.

Finally, our model also underscores that NAV has a P/CF ratio of 5.75. 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. NAV's current P/CF looks attractive when compared to its industry's average P/CF of 6.31. Over the past 52 weeks, NAV's P/CF has been as high as 10.43 and as low as 4.08, with a median of 5.70.

These are just a handful of the figures considered in Navistar'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 NAV is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Navistar International Corporation (NAV) - free report >>

Published in