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Are Investors Undervaluing SkyWest (SKYW) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is SkyWest (SKYW). SKYW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that SKYW has a P/B ratio of 1.56. The P/B ratio is used to compare a stock's market value with 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 2.65. Over the past year, SKYW's P/B has been as high as 1.83 and as low as 1.15, with a median of 1.50.

Finally, we should also recognize that SKYW has a P/CF ratio of 4.88. 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. SKYW's P/CF compares to its industry's average P/CF of 6.23. Within the past 12 months, SKYW's P/CF has been as high as 5.03 and as low as 2.85, with a median of 4.40.

These are only a few of the key metrics included in SkyWest'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, SKYW looks like an impressive value stock at the moment.


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