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Is United Rentals (URI) Stock Undervalued Right Now?

Zacks Equity Research
Alexion (ALXN) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is United Rentals (URI). URI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 5.32. This compares to its industry's average Forward P/E of 7.50. Over the past 52 weeks, URI's Forward P/E has been as high as 16.57 and as low as 4.87, with a median of 9.46.

Investors will also notice that URI has a PEG ratio of 0.30. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. URI's industry currently sports an average PEG of 0.50. URI's PEG has been as high as 0.90 and as low as 0.27, with a median of 0.52, all within the past year.

These are just a handful of the figures considered in United Rentals'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 URI is an impressive value stock right now.


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