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Is Enova International (ENVA) Stock Undervalued Right Now?

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·2 min read
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is Enova International (ENVA). ENVA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ENVA has a P/S ratio of 1. This compares to its industry's average P/S of 1.3.

Finally, we should also recognize that ENVA has a P/CF ratio of 2.74. 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. ENVA's current P/CF looks attractive when compared to its industry's average P/CF of 4.46. Within the past 12 months, ENVA's P/CF has been as high as 21.30 and as low as 2.02, with a median of 8.68.

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


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