Is Cinemark (CNK) 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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Cinemark (CNK). CNK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13.97 right now. For comparison, its industry sports an average P/E of 17.56. Over the past year, CNK's Forward P/E has been as high as 73.58 and as low as -6.14, with a median of 22.24.
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. CNK has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.93.
Investors could also keep in mind Target Hospitality (TH), an Leisure and Recreation Services stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Target Hospitality is currently trading with a Forward P/E ratio of 12.83 while its PEG ratio sits at 0.86. Both of the company's metrics compare favorably to its industry's average P/E of 17.56 and average PEG ratio of 1.09.
Over the last 12 months, TH's P/E has been as high as 15.85, as low as 5.67, with a median of 9.66, and its PEG ratio has been as high as 1.06, as low as 0.38, with a median of 0.64.
Target Hospitality also has a P/B ratio of 5.13 compared to its industry's price-to-book ratio of 2.87. Over the past year, its P/B ratio has been as high as 10.96, as low as 4.29, with a median of 6.40.
These are just a handful of the figures considered in Cinemark and Target Hospitality's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CNK and TH is an impressive value stock right now.
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Cinemark Holdings Inc (CNK) : Free Stock Analysis Report
Target Hospitality Corp. (TH) : Free Stock Analysis Report
