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Should Value Investors Buy ProPetro Holding (PUMP) Stock?

Zacks Equity Research
Asbury Automotive (ABG) possesses 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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is ProPetro Holding (PUMP). PUMP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.24. This compares to its industry's average Forward P/E of 21.54. Over the past year, PUMP's Forward P/E has been as high as 10.02 and as low as 5.40, with a median of 8.52.

Investors should also note that PUMP holds a PEG ratio of 0.63. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PUMP's industry currently sports an average PEG of 1. Over the last 12 months, PUMP's PEG has been as high as 1.65 and as low as 0.11, with a median of 0.64.

Finally, we should also recognize that PUMP has a P/CF ratio of 7.70. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.41. Within the past 12 months, PUMP's P/CF has been as high as 12.78 and as low as 4.09, with a median of 7.38.

These figures are just a handful of the metrics value investors tend to look at, but they help show that ProPetro Holding is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PUMP feels like a great value stock at the moment.


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