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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 to watch right now is Aaron's (AAN - Free Report) . AAN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We also note that AAN holds a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AAN's PEG compares to its industry's average PEG of 1.19. Over the last 12 months, AAN's PEG has been as high as 1.05 and as low as 0.75, with a median of 0.94.

We should also highlight that AAN has a P/B ratio of 2.82. The P/B ratio pits a stock's market value against 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 4.06. Within the past 52 weeks, AAN's P/B has been as high as 2.82 and as low as 1.54, with a median of 2.05.

Finally, we should also recognize that AAN has a P/CF ratio of 2.46. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AAN's P/CF compares to its industry's average P/CF of 6.72. Within the past 12 months, AAN's P/CF has been as high as 2.46 and as low as 1.34, with a median of 1.81.

These are only a few of the key metrics included in Aaron's'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, AAN looks like an impressive value stock at the moment.


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