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Is Herc Holdings (HRI) 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.

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 stock to keep an eye on is Herc Holdings (HRI - Free Report) . HRI 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 9.56 right now. For comparison, its industry sports an average P/E of 10.74. Over the last 12 months, HRI's Forward P/E has been as high as 26.85 and as low as 9.54, with a median of 14.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HRI has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.

Finally, investors should note that HRI has a P/CF ratio of 2.10. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.87. Over the past 52 weeks, HRI's P/CF has been as high as 2.59 and as low as 1.03, with a median of 2.16.

These are only a few of the key metrics included in Herc Holdings's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HRI looks like an impressive value stock at the moment.


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