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Is Beazer Homes (BZH) Stock Undervalued Right Now?

Zacks Equity Research
·2 mins read

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 company value investors might notice is Beazer Homes (BZH). BZH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Another valuation metric that we should highlight is BZH's P/B ratio of 0.59. 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 solid versus its industry's average P/B of 1.38. BZH's P/B has been as high as 1 and as low as 0.26, with a median of 0.73, over the past year.

Finally, investors will want to recognize that BZH has a P/CF ratio of 7.16. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.69. BZH's P/CF has been as high as 7.31 and as low as -57.58, with a median of -6.98, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Beazer Homes is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BZH feels like a great value stock at the moment.


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Zacks Investment Research