Should Value Investors Buy Avis Budget Group (CAR) Stock?
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...
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 value investors might notice is Avis Budget Group (CAR). CAR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 14.34, which compares to its industry's average of 25.61. Over the past 52 weeks, CAR's Forward P/E has been as high as 185.44 and as low as -790.64, with a median of 15.61.
Investors should also note that CAR holds a PEG ratio of 0.52. 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. CAR's PEG compares to its industry's average PEG of 0.70. Over the past 52 weeks, CAR's PEG has been as high as 11.83 and as low as 0.16, with a median of 0.28.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CAR has a P/S ratio of 1.27. This compares to its industry's average P/S of 1.29.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Avis Budget Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAR feels like a great value stock at the moment.
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Avis Budget Group, Inc. (CAR): Free Stock Analysis Report
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