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Is Summit Hotel Properties (INN) Stock Undervalued 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, 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 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 to watch right now is Summit Hotel Properties (INN). INN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.85, while its industry has an average P/E of 18.03. Over the last 12 months, INN's Forward P/E has been as high as 10.12 and as low as 7.17, with a median of 8.92.

Another valuation metric that we should highlight is INN's P/B ratio of 0.97. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.69. INN's P/B has been as high as 1.22 and as low as 0.82, with a median of 1.01, over the past year.

Finally, our model also underscores that INN has a P/CF ratio of 5.52. 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. INN's P/CF compares to its industry's average P/CF of 16.78. Over the past year, INN's P/CF has been as high as 8.11 and as low as 5.06, with a median of 6.08.

These are just a handful of the figures considered in Summit Hotel Properties's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that INN is an impressive value stock right now.


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