Is Beacon Roofing Supply (BECN) Stock Undervalued Right Now?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 company value investors might notice is Beacon Roofing Supply (BECN). BECN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.05, while its industry has an average P/E of 19.91. BECN's Forward P/E has been as high as 12.74 and as low as 7.29, with a median of 10.17, all within the past year.
We also note that BECN holds a PEG ratio of 1.20. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BECN's PEG compares to its industry's average PEG of 2.11. BECN's PEG has been as high as 1.74 and as low as 1.14, with a median of 1.55, all within the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BECN has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.22.
Finally, investors will want to recognize that BECN has a P/CF ratio of 9.62. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.87. BECN's P/CF has been as high as 12.27 and as low as 5.55, with a median of 8.05, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Beacon Roofing Supply is likely undervalued currently. And when considering the strength of its earnings outlook, BECN sticks out at as one of the market's strongest value stocks.
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Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report
