Are Investors Undervaluing Zions Bancorporation (ZION) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Zions Bancorporation (ZION) is a stock many investors are watching right now. ZION is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 9.09, which compares to its industry's average of 9.42. Over the past 52 weeks, ZION's Forward P/E has been as high as 11.20 and as low as 3.73, with a median of 8.25.
Another valuation metric that we should highlight is ZION's P/B ratio of 1.12. 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 attractive against its industry's average P/B of 1.17. Within the past 52 weeks, ZION's P/B has been as high as 1.39 and as low as 0.62, with a median of 1.06.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ZION has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.69.
Finally, investors should note that ZION has a P/CF ratio of 7.17. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ZION's current P/CF looks attractive when compared to its industry's average P/CF of 8.23. Within the past 12 months, ZION's P/CF has been as high as 8.09 and as low as 2.85, with a median of 5.09.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Zions Bancorporation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ZION feels like a great value stock at the moment.
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Zions Bancorporation, N.A. (ZION) : Free Stock Analysis Report
