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Is Aegion (AEGN) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

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 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.

One stock to keep an eye on is Aegion (AEGN). AEGN is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 16.95. This compares to its industry's average Forward P/E of 18.61. Over the last 12 months, AEGN's Forward P/E has been as high as 20.58 and as low as 9.75, with a median of 15.21.

AEGN is also sporting a PEG ratio of 1.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AEGN's industry currently sports an average PEG of 1.62. Over the last 12 months, AEGN's PEG has been as high as 1.62 and as low as 1.39, with a median of 1.52.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AEGN has a P/S ratio of 0.46. This compares to its industry's average P/S of 1.37.

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


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