Is PetIQ (PETQ) Stock Undervalued Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
PetIQ (PETQ) is a stock many investors are watching right now. PETQ is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.49, which compares to its industry's average of 20.78. Over the past year, PETQ's Forward P/E has been as high as 22.18 and as low as 11.85, with a median of 16.04.
Investors should also note that PETQ holds a PEG ratio of 1.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PETQ's industry has an average PEG of 2.32 right now. PETQ's PEG has been as high as 2.77 and as low as 1.83, with a median of 2.16, all within the past year.
Another valuation metric that we should highlight is PETQ's P/B ratio of 2.45. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.74. Over the past year, PETQ's P/B has been as high as 2.75 and as low as 1.62, with a median of 2.28.
Finally, our model also underscores that PETQ has a P/CF ratio of 11.60. 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. PETQ's P/CF compares to its industry's average P/CF of 34.13. Over the past 52 weeks, PETQ's P/CF has been as high as 13.39 and as low as 8.36, with a median of 9.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that PetIQ is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PETQ feels like a great value stock at the moment.
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PetIQ, Inc. (PETQ) : Free Stock Analysis Report
