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Are Investors Undervaluing Lazard Ltd (LAZ) Right Now?

Zacks Equity Research
RLI Corp. (RLI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is Lazard Ltd (LAZ). LAZ is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.27. This compares to its industry's average Forward P/E of 12.32. Over the last 12 months, LAZ's Forward P/E has been as high as 15.55 and as low as 10.77, with a median of 12.65.

Investors should also note that LAZ holds a PEG ratio of 1.07. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LAZ's industry currently sports an average PEG of 1.21. Over the past 52 weeks, LAZ's PEG has been as high as 1.90 and as low as 1.07, with a median of 1.38.

Finally, investors will want to recognize that LAZ has a P/CF ratio of 9.34. 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 stock's P/CF looks attractive against its industry's average P/CF of 17.38. Over the past year, LAZ's P/CF has been as high as 10.89 and as low as 6.03, with a median of 9.31.

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


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