Are Investors Undervaluing Jabil (JBL) Right Now?
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...
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.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
Jabil (JBL) is a stock many investors are watching right now. JBL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.20 right now. For comparison, its industry sports an average P/E of 10.71. Over the past year, JBL's Forward P/E has been as high as 11.10 and as low as 7.72, with a median of 9.79.
JBL is also sporting a PEG ratio of 0.85. 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. JBL's PEG compares to its industry's average PEG of 0.95. Within the past year, JBL's PEG has been as high as 0.93 and as low as 0.64, with a median of 0.82.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. JBL has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.36.
Finally, investors should note that JBL has a P/CF ratio of 6.49. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. JBL's current P/CF looks attractive when compared to its industry's average P/CF of 7.75. Within the past 12 months, JBL's P/CF has been as high as 7.31 and as low as 5.45, with a median of 6.48.
These are only a few of the key metrics included in Jabil'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, JBL looks like an impressive value stock at the moment.
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