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Is Navient (NAVI) a Great Value Stock Right Now?

Zacks Equity Research

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Navient (NAVI). NAVI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 4.67, while its industry has an average P/E of 8.26. NAVI's Forward P/E has been as high as 6.98 and as low as 4.59, with a median of 5.76, all within the past year.

We also note that NAVI holds a PEG ratio of 0.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NAVI's industry has an average PEG of 0.72 right now. Over the past 52 weeks, NAVI's PEG has been as high as 2.33 and as low as 0.19, with a median of 1.90.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NAVI has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.31.

Finally, our model also underscores that NAVI has a P/CF ratio of 4.95. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.05. Within the past 12 months, NAVI's P/CF has been as high as 7.78 and as low as 4.72, with a median of 6.21.

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


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