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Is Avnet (AVT) Stock Undervalued Right Now?

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·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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Avnet (AVT) is a stock many investors are watching right now. AVT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that AVT holds a PEG ratio of 0.83. 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. AVT's industry has an average PEG of 1.13 right now. Over the last 12 months, AVT's PEG has been as high as 1.90 and as low as 0.67, with a median of 0.89.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AVT has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.33.

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


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