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Is Fly Leasing (FLY) Stock Undervalued Right Now?

Zacks Equity Research
CyberArk (CYBR) closed the most recent trading day at $124.83, moving -1.8% from the previous trading session.

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 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 company value investors might notice is Fly Leasing (FLY). FLY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 4.42, which compares to its industry's average of 11.07. FLY's Forward P/E has been as high as 6.46 and as low as 3.81, with a median of 5.56, all within the past year.

Investors should also note that FLY holds a PEG ratio of 0.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FLY's industry has an average PEG of 1.11 right now. Over the last 12 months, FLY's PEG has been as high as 0.65 and as low as 0.38, with a median of 0.56.

Another notable valuation metric for FLY is its P/B ratio of 0.55. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.47. Over the past 12 months, FLY's P/B has been as high as 0.77 and as low as 0.43, with a median of 0.66.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FLY has a P/S ratio of 0.93. This compares to its industry's average P/S of 0.97.

Finally, our model also underscores that FLY has a P/CF ratio of 1.76. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.61. Over the past 52 weeks, FLY's P/CF has been as high as 2.61 and as low as 1.38, with a median of 2.11.

These are just a handful of the figures considered in Fly Leasing'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 FLY is an impressive value stock right now.


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