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Is United Rentals (URI) a Great Value Stock Right Now?

Zacks Equity Research
Varonis (VRNS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 United Rentals (URI). URI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 5.84, which compares to its industry's average of 9.89. URI's Forward P/E has been as high as 11.94 and as low as 4.87, with a median of 8.70, all within the past year.

Investors will also notice that URI has a PEG ratio of 0.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. URI's industry has an average PEG of 0.80 right now. Over the last 12 months, URI's PEG has been as high as 0.65 and as low as 0.27, with a median of 0.49.

Finally, investors should note that URI has a P/CF ratio of 3.41. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. URI's current P/CF looks attractive when compared to its industry's average P/CF of 12.18. Over the past 52 weeks, URI's P/CF has been as high as 5.87 and as low as 2.43, with a median of 4.05.

These are only a few of the key metrics included in United Rentals'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, URI looks like an impressive value stock at the moment.

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