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Is Atlantic Power (AT) Stock Undervalued Right Now?

Zacks Equity Research
AeroVironment (AVAV) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

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.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Atlantic Power (AT) is a stock many investors are watching right now. AT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 4.76. This compares to its industry's average Forward P/E of 13.01. Over the last 12 months, AT's Forward P/E has been as high as 12.70 and as low as -30.13, with a median of -14.42.

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. AT has a P/S ratio of 0.86. This compares to its industry's average P/S of 1.88.

Finally, we should also recognize that AT has a P/CF ratio of 3.80. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. AT's current P/CF looks attractive when compared to its industry's average P/CF of 6.93. Within the past 12 months, AT's P/CF has been as high as 9.13 and as low as 3.29, with a median of 4.83.

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


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