The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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.
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.
Materialise (MTLS) is a stock many investors are watching right now. MTLS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 27.09. This compares to its industry's average Forward P/E of 34.19. MTLS's Forward P/E has been as high as 76.57 and as low as 27.09, with a median of 32.38, all within the past year.
We should also highlight that MTLS has a P/B ratio of 1.30. 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 stock's P/B looks solid versus its industry's average P/B of 3.29. Over the past year, MTLS's P/B has been as high as 1.58 and as low as 1.07, with a median of 1.21.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MTLS has a P/S ratio of 1.3. This compares to its industry's average P/S of 3.11.
Finally, our model also underscores that MTLS has a P/CF ratio of 8.83. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.08. Over the past 52 weeks, MTLS's P/CF has been as high as 18.06 and as low as 7.39, with a median of 9.99.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Materialise is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MTLS feels like a great value stock at the moment.
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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.
