Is AAR (AIR) a Great Value Stock Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One stock to keep an eye on is AAR (AIR). AIR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.59. This compares to its industry's average Forward P/E of 27.32. Over the last 12 months, AIR's Forward P/E has been as high as 18.06 and as low as 11.99, with a median of 15.61.
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. AIR has a P/S ratio of 0.98. This compares to its industry's average P/S of 2.21.
Finally, our model also underscores that AIR has a P/CF ratio of 21.45. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 43.09. Within the past 12 months, AIR's P/CF has been as high as 22.48 and as low as 11.18, with a median of 15.68.
These figures are just a handful of the metrics value investors tend to look at, but they help show that AAR is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AIR feels like a great value stock at the moment.
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AAR Corp. (AIR) : Free Stock Analysis Report
