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Is Entravision Communications (EVC) Stock Undervalued Right Now?

Zacks Equity Research
Momenta (MNTA) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

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.

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 Entravision Communications (EVC). EVC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 18.55, which compares to its industry's average of 22.22. EVC's Forward P/E has been as high as 65.08 and as low as 13.32, with a median of 34.37, all within the past year.

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. EVC has a P/S ratio of 1.16. This compares to its industry's average P/S of 1.24.

Finally, investors should note that EVC has a P/CF ratio of 9.76. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. EVC's P/CF compares to its industry's average P/CF of 30.65. Over the past 52 weeks, EVC's P/CF has been as high as 14.23 and as low as 1.91, with a median of 2.52.

These are only a few of the key metrics included in Entravision Communications'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, EVC looks like an impressive value stock at the moment.


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