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Is Koppers (KOP) 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, 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Koppers (KOP - Free Report) is a stock many investors are watching right now. KOP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 8.45. This compares to its industry's average Forward P/E of 12.89. Over the last 12 months, KOP's Forward P/E has been as high as 8.54 and as low as 4.01, with a median of 7.06.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KOP has a P/S ratio of 0.4. This compares to its industry's average P/S of 1.02.

Finally, our model also underscores that KOP has a P/CF ratio of 8.72. 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 stock's P/CF looks attractive against its industry's average P/CF of 9.98. KOP's P/CF has been as high as 9.77 and as low as 4.71, with a median of 7.07, all within the past year.

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


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