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Is Navient (NAVI) 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.

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.

One stock to keep an eye on is Navient (NAVI). NAVI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 4.93 right now. For comparison, its industry sports an average P/E of 8.27. Over the past 52 weeks, NAVI's Forward P/E has been as high as 6.98 and as low as 4.64, with a median of 5.80.

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. NAVI has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.37.

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


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