Are Investors Undervaluing Avanos Medical (AVNS) Right Now?
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Avanos Medical (AVNS). AVNS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 17.13, which compares to its industry's average of 34.91. AVNS's Forward P/E has been as high as 19.05 and as low as 11.84, with a median of 15.77, all within the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AVNS has a P/S ratio of 1.69. This compares to its industry's average P/S of 3.97.
Finally, our model also underscores that AVNS has a P/CF ratio of 14.47. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 22.86. Over the past 52 weeks, AVNS's P/CF has been as high as 40.24 and as low as 10.62, with a median of 14.68.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Avanos Medical is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AVNS feels like a great value stock at the moment.
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AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
