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Are Investors Undervaluing EchoStar (SATS) Right Now?

Zacks Equity Research
·2 mins read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is EchoStar (SATS). SATS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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. SATS has a P/S ratio of 1.31. This compares to its industry's average P/S of 1.35.

Finally, our model also underscores that SATS has a P/CF ratio of 6.34. 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 6.57. Within the past 12 months, SATS's P/CF has been as high as 8.64 and as low as 4.86, with a median of 7.17.

These figures are just a handful of the metrics value investors tend to look at, but they help show that EchoStar is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SATS feels like a great value stock at the moment.

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