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Is Beazer Homes (BZH) a Great Value Stock Right Now?

Zacks Equity Research
·2 mins read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

One stock to keep an eye on is Beazer Homes (BZH). BZH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that BZH has a P/B ratio of 0.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.38. Within the past 52 weeks, BZH's P/B has been as high as 1 and as low as 0.26, with a median of 0.73.

Finally, our model also underscores that BZH has a P/CF ratio of 6.80. 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 9.69. Over the past year, BZH's P/CF has been as high as 7.72 and as low as -57.58, with a median of -6.83.

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


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