Are Investors Undervaluing ProPetro Holding (PUMP) Right Now?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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.
ProPetro Holding (PUMP) is a stock many investors are watching right now. PUMP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.47, while its industry has an average P/E of 22.01. Over the last 12 months, PUMP's Forward P/E has been as high as 10.02 and as low as 5.40, with a median of 8.52.
Investors will also notice that PUMP has a PEG ratio of 0.63. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PUMP's PEG compares to its industry's average PEG of 1.12. Over the last 12 months, PUMP's PEG has been as high as 1.59 and as low as 0.11, with a median of 0.16.
Finally, we should also recognize that PUMP has a P/CF ratio of 7.84. 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. PUMP's P/CF compares to its industry's average P/CF of 9.77. Within the past 12 months, PUMP's P/CF has been as high as 12.78 and as low as 4.09, with a median of 7.38.
These are just a handful of the figures considered in ProPetro Holding's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PUMP is an impressive value stock right now.
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