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Are Investors Undervaluing Vistra Energy Corp. (VST) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Vistra Energy Corp. (VST - Free Report) is a stock many investors are watching right now. VST is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.02, while its industry has an average P/E of 15.49. Over the past year, VST's Forward P/E has been as high as 15.63 and as low as 5.51, with a median of 10.70.

Investors should also recognize that VST has a P/B ratio of 0.97. 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. This stock's P/B looks solid versus its industry's average P/B of 1.75. Within the past 52 weeks, VST's P/B has been as high as 1.73 and as low as 0.77, with a median of 1.49.

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. VST has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.84.

Finally, investors will want to recognize that VST has a P/CF ratio of 2.82. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. VST's P/CF compares to its industry's average P/CF of 7.58. Within the past 12 months, VST's P/CF has been as high as 6.06 and as low as 2.25, with a median of 4.99.

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


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