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Are Investors Undervaluing Air Lease (AL) 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.

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.

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 Air Lease (AL). AL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.92. This compares to its industry's average Forward P/E of 12.40. Over the past 52 weeks, AL's Forward P/E has been as high as 13.97 and as low as 6.35, with a median of 8.48.

Investors should also note that AL holds a PEG ratio of 0.81. 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. AL's industry currently sports an average PEG of 1.22. AL's PEG has been as high as 1.65 and as low as 0.64, with a median of 1.14, all within the past year.

We should also highlight that AL has a P/B ratio of 0.97. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.37. Within the past 52 weeks, AL's P/B has been as high as 1.36 and as low as 0.89, with a median of 1.09.

Finally, investors will want to recognize that AL has a P/CF ratio of 3.13. 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. AL's current P/CF looks attractive when compared to its industry's average P/CF of 4.41. Over the past year, AL's P/CF has been as high as 5.93 and as low as 2.86, with a median of 3.73.

Value investors will likely look at more than just these metrics, but the above data helps show that Air Lease is likely undervalued currently. And when considering the strength of its earnings outlook, AL sticks out at as one of the market's strongest value stocks.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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