Are Investors Undervaluing Construction Partners (ROAD) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Construction Partners (ROAD) is a stock many investors are watching right now. ROAD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors will also notice that ROAD has a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ROAD's industry has an average PEG of 1.36 right now. Over the last 12 months, ROAD's PEG has been as high as 2.04 and as low as 0.61, with a median of 0.97.
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. ROAD has a P/S ratio of 1.22. This compares to its industry's average P/S of 1.51.
Finally, our model also underscores that ROAD has a P/CF ratio of 16.95. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.87. Over the past 52 weeks, ROAD's P/CF has been as high as 20.27 and as low as 13.60, with a median of 16.52.
Value investors will likely look at more than just these metrics, but the above data helps show that Construction Partners is likely undervalued currently. And when considering the strength of its earnings outlook, ROAD sticks out at as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
