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Are Investors Undervaluing JetBlue Airways (JBLU) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is JetBlue Airways (JBLU - Free Report) . JBLU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 7.11, which compares to its industry's average of 8.24. Over the past year, JBLU's Forward P/E has been as high as 11.94 and as low as 7.05, with a median of 8.96.

We also note that JBLU holds a PEG ratio of 0.30. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. JBLU's PEG compares to its industry's average PEG of 0.44. Over the last 12 months, JBLU's PEG has been as high as 5.81 and as low as 0.30, with a median of 1.13.

We should also highlight that JBLU has a P/B ratio of 1.04. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. JBLU's current P/B looks attractive when compared to its industry's average P/B of 2.29. Within the past 52 weeks, JBLU's P/B has been as high as 1.39 and as low as 1.03, with a median of 1.18.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. JBLU has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.63.

Finally, our model also underscores that JBLU has a P/CF ratio of 5.28. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.48. Over the past 52 weeks, JBLU's P/CF has been as high as 9.35 and as low as 4.08, with a median of 6.25.

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


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