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Are Investors Undervaluing Photronics (PLAB) Right Now?

Zacks Equity Research

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Photronics (PLAB). PLAB is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 16.21. This compares to its industry's average Forward P/E of 16.72. Over the past 52 weeks, PLAB's Forward P/E has been as high as 21.22 and as low as 12.80, with a median of 15.53.

Investors should also recognize that PLAB has a P/B ratio of 1.13. Investors use the P/B ratio to look at a stock's market value versus 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 1.18. Within the past 52 weeks, PLAB's P/B has been as high as 1.20 and as low as 0.59, with a median of 0.74.

Finally, our model also underscores that PLAB has a P/CF ratio of 8.99. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.32. Within the past 12 months, PLAB's P/CF has been as high as 9.58 and as low as 4.78, with a median of 5.78.

These are only a few of the key metrics included in Photronics's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PLAB looks like an impressive value stock at the moment.


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