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Are Investors Undervaluing United Rentals (URI) Right Now?

Zacks Equity Research
Does Zebra Technologies (ZBRA) have what it takes to be a top stock pick for momentum investors? Let's find out.

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 to watch right now is United Rentals (URI). URI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.11, which compares to its industry's average of 8.73. Over the past 52 weeks, URI's Forward P/E has been as high as 16.57 and as low as 5.88, with a median of 10.29.

Investors will also notice that URI has a PEG ratio of 0.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. URI's industry currently sports an average PEG of 0.54. Over the past 52 weeks, URI's PEG has been as high as 0.90 and as low as 0.33, with a median of 0.56.

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


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