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Are Investors Undervaluing Enova International (ENVA) Right Now?

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·2 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 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.

Enova International (ENVA) is a stock many investors are watching right now. ENVA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.55 right now. For comparison, its industry sports an average P/E of 17.24. Over the last 12 months, ENVA's Forward P/E has been as high as 10.48 and as low as 2.37, with a median of 5.30.

Finally, our model also underscores that ENVA has a P/CF ratio of 2.97. 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. ENVA's current P/CF looks attractive when compared to its industry's average P/CF of 4.46. ENVA's P/CF has been as high as 21.30 and as low as 1.96, with a median of 8.15, all within the past year.

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


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Zacks Investment Research