Are Investors Undervaluing Avis Budget Group (CAR) 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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 to watch right now is Avis Budget Group (CAR). CAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CAR has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.98.
Finally, we should also recognize that CAR has a P/CF ratio of 1.32. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 3.20. Over the past year, CAR's P/CF has been as high as 1.35 and as low as 0.17, with a median of 0.79.
These are only a few of the key metrics included in Avis Budget Group'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, CAR looks like an impressive value stock at the moment.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
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