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Is Air Lease (AL) a Great Value Stock Right Now?

Zacks Equity Research
·3 mins read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Air Lease (AL) is a stock many investors are watching right now. AL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 6.82. This compares to its industry's average Forward P/E of 12.84. Over the past year, AL's Forward P/E has been as high as 9.41 and as low as 1.77, with a median of 7.01.

Investors should also note that AL holds a PEG ratio of 0.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AL's industry currently sports an average PEG of 0.78. Over the last 12 months, AL's PEG has been as high as 2.94 and as low as 0.19, with a median of 0.77.

Another notable valuation metric for AL is its P/B ratio of 0.60. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. AL's current P/B looks attractive when compared to its industry's average P/B of 0.92. Within the past 52 weeks, AL's P/B has been as high as 0.99 and as low as 0.22, with a median of 0.64.

Finally, we should also recognize that AL has a P/CF ratio of 2.46. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. AL's P/CF compares to its industry's average P/CF of 4.93. AL's P/CF has been as high as 4.24 and as low as 0.90, with a median of 2.63, all within the past year.

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

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Zacks Investment Research