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

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Zacks Equity Research
·2 min read
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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company to watch right now 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 3.42 right now. For comparison, its industry sports an average P/E of 7.59. Over the past year, NAVI's Forward P/E has been as high as 5.49 and as low as 1.60, with a median of 3.45.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.42. This compares to its industry's average P/S of 1.15.

Finally, investors should note that NAVI has a P/CF ratio of 4.31. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. NAVI's current P/CF looks attractive when compared to its industry's average P/CF of 4.46. Within the past 12 months, NAVI's P/CF has been as high as 6.09 and as low as 1.76, with a median of 4.34.

These are only a few of the key metrics included in Navient's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, NAVI looks like an impressive value stock at the moment.


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