Should Value Investors Buy United Rentals (URI) Stock?
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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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 company to watch right now is United Rentals (URI). URI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 11.07 right now. For comparison, its industry sports an average P/E of 13.80. Over the last 12 months, URI's Forward P/E has been as high as 12.69 and as low as 7.49, with a median of 9.67.
Finally, investors will want to recognize that URI has a P/CF ratio of 7.54. 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 17.57. Over the past 52 weeks, URI's P/CF has been as high as 7.87 and as low as 4.44, with a median of 5.94.
These figures are just a handful of the metrics value investors tend to look at, but they help show that United Rentals is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, URI feels like a great value stock at the moment.
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United Rentals, Inc. (URI) : Free Stock Analysis Report
