Are Investors Undervaluing Playa Hotels & Resorts (PLYA) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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.
One company value investors might notice is Playa Hotels & Resorts (PLYA). PLYA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.04, while its industry has an average P/E of 21.41. Over the past year, PLYA's Forward P/E has been as high as 55.60 and as low as 9.13, with a median of 15.25.
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. PLYA has a P/S ratio of 1.65. This compares to its industry's average P/S of 2.18.
Finally, we should also recognize that PLYA has a P/CF ratio of 10.68. 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. PLYA's P/CF compares to its industry's average P/CF of 19.24. PLYA's P/CF has been as high as 14.73 and as low as 5.82, with a median of 8.06, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Playa Hotels & Resorts is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PLYA feels like a great value stock at the moment.
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Playa Hotels & Resorts N.V. (PLYA) : Free Stock Analysis Report
