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Is Lions Gate Entertainment (LGF.A) a Great Value Stock Right Now?

Zacks Equity Research

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 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.

Lions Gate Entertainment (LGF.A) is a stock many investors are watching right now. LGF.A is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We should also highlight that LGF.A has a P/B ratio of 0.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. LGF.A's current P/B looks attractive when compared to its industry's average P/B of 1.33. LGF.A's P/B has been as high as 1.75 and as low as 0.69, with a median of 1.11, over the past year.

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. LGF.A has a P/S ratio of 0.66. This compares to its industry's average P/S of 0.87.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Lions Gate Entertainment is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LGF.A feels like a great value stock at the moment.


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