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Is Photronics (PLAB) a Great Value Stock Right Now?

Zacks Equity Research
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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Photronics (PLAB). PLAB is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 19.66, which compares to its industry's average of 19.68. Over the past 52 weeks, PLAB's Forward P/E has been as high as 51.98 and as low as 11.98, with a median of 17.97.

We also note that PLAB holds a PEG ratio of 1.97. 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. PLAB's industry currently sports an average PEG of 1.97. PLAB's PEG has been as high as 5.20 and as low as 1.20, with a median of 1.80, all within the past year.

Finally, we should also recognize that PLAB has a P/CF ratio of 6.05. 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. PLAB's P/CF compares to its industry's average P/CF of 6.43. Over the past year, PLAB's P/CF has been as high as 7.26 and as low as 4.92, with a median of 5.78.

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

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