Is Aaron's (AAN) Stock Undervalued 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is Aaron's (AAN). AAN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.32 right now. For comparison, its industry sports an average P/E of 11.63. Over the last 12 months, AAN's Forward P/E has been as high as 13.21 and as low as 5.94, with a median of 8.82.
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. AAN has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.58.
Another great Consumer Services - Miscellaneous stock you could consider is SP Plus (SP), which is a # 2 (Buy) stock with a Value Score of A.
SP Plus also has a P/B ratio of 3.12 compared to its industry's price-to-book ratio of 5.83. Over the past year, its P/B ratio has been as high as 4.20, as low as 2.77, with a median of 3.27.
Value investors will likely look at more than just these metrics, but the above data helps show that Aaron's and SP Plus are likely undervalued currently. And when considering the strength of its earnings outlook, AAN and SP sticks out as one of the market's strongest value stocks.
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The Aaron's Company, Inc. (AAN) : Free Stock Analysis Report
SP Plus Corporation (SP) : Free Stock Analysis Report
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