Back to top

Image: Bigstock

Is AZZ (AZZ) Stock Undervalued Right Now?

Read MoreHide Full Article

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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

AZZ (AZZ - Free Report) is a stock many investors are watching right now. AZZ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.45, while its industry has an average P/E of 20.79. Over the past 52 weeks, AZZ's Forward P/E has been as high as 17.54 and as low as 7.24, with a median of 14.17.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AZZ has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.71.

Finally, our model also underscores that AZZ has a P/CF ratio of 8.94. 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. AZZ's P/CF compares to its industry's average P/CF of 22.81. Within the past 12 months, AZZ's P/CF has been as high as 11.98 and as low as 5.46, with a median of 9.57.

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

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

AZZ Inc. (AZZ) - free report >>

Published in