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Should Value Investors Buy Avis Budget Group (CAR) Stock?

·2 min read

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Avis Budget Group (CAR). CAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 6.75, while its industry has an average P/E of 13.91. CAR's Forward P/E has been as high as 37.43 and as low as 4.80, with a median of 10.34, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CAR has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.94.

Investors could also keep in mind IBEX Limited (IBEX), an Business - Services stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Furthermore, IBEX Limited holds a P/B ratio of 3.66 and its industry's price-to-book ratio is 2.62. IBEX's P/B has been as high as 4.66, as low as 2.56, with a median of 3.24 over the past 12 months.

Value investors will likely look at more than just these metrics, but the above data helps show that Avis Budget Group and IBEX Limited are likely undervalued currently. And when considering the strength of its earnings outlook, CAR and IBEX sticks out as one of the market's strongest value stocks.


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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
 
IBEX Limited (IBEX) : Free Stock Analysis Report
 
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