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Are Investors Undervaluing Cardtronics (CATM) Right Now?

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Zacks Equity Research
·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.

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.

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 Cardtronics (CATM). CATM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 14.15 right now. For comparison, its industry sports an average P/E of 30.82. Over the past 52 weeks, CATM's Forward P/E has been as high as 18.59 and as low as 11.29, with a median of 15.25.

We should also highlight that CATM has a P/B ratio of 4.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 7.82. Within the past 52 weeks, CATM's P/B has been as high as 5.61 and as low as 3.30, with a median of 4.18.

Finally, our model also underscores that CATM has a P/CF ratio of 7.06. 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. CATM's P/CF compares to its industry's average P/CF of 25.14. Within the past 12 months, CATM's P/CF has been as high as 8.78 and as low as 5.77, with a median of 7.38.

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


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Zacks Investment Research