Is Construction Partners (ROAD) Stock Undervalued Right Now?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Construction Partners (ROAD). ROAD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also note that ROAD holds a PEG ratio of 0.62. 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. ROAD's industry has an average PEG of 1.05 right now. Over the past 52 weeks, ROAD's PEG has been as high as 1.85 and as low as 0.61, with a median of 0.96.
Another valuation metric that we should highlight is ROAD's P/B ratio of 3.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.86. Within the past 52 weeks, ROAD's P/B has been as high as 3.98 and as low as 2.84, with a median of 3.24.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ROAD has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.36.
These are only a few of the key metrics included in Construction Partners's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ROAD looks like an impressive value stock at the moment.
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Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
