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Is ABM Industries (ABM) Stock Undervalued Right Now?

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Zacks Equity Research
·2 min read
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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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is ABM Industries (ABM). ABM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 17.37 right now. For comparison, its industry sports an average P/E of 40.27. Over the past year, ABM's Forward P/E has been as high as 22.74 and as low as 9.74, with a median of 17.17.

Finally, our model also underscores that ABM has a P/CF ratio of 30.49. 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. ABM's current P/CF looks attractive when compared to its industry's average P/CF of 41.80. ABM's P/CF has been as high as 33.22 and as low as 5.55, with a median of 27.43, all within the past year.

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


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Zacks Investment Research