Is Echo Global Logistics (ECHO) Stock Undervalued Right Now?
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 the latest value, growth, and momentum trends to underscore 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 value investors might notice is Echo Global Logistics (ECHO). ECHO is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 23.04 right now. For comparison, its industry sports an average P/E of 31.41. Over the past year, ECHO's Forward P/E has been as high as 23.43 and as low as 10.34, with a median of 14.28.
We also note that ECHO holds a PEG ratio of 1.28. 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. ECHO's PEG compares to its industry's average PEG of 2.67. Within the past year, ECHO's PEG has been as high as 1.34 and as low as 0.59, with a median of 0.82.
Investors should also recognize that ECHO has a P/B ratio of 1.67. 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. ECHO's current P/B looks attractive when compared to its industry's average P/B of 3.94. Within the past 52 weeks, ECHO's P/B has been as high as 1.71 and as low as 1.05, with a median of 1.47.
Finally, our model also underscores that ECHO has a P/CF ratio of 12.93. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ECHO's current P/CF looks attractive when compared to its industry's average P/CF of 20.68. ECHO's P/CF has been as high as 12.93 and as low as 7.39, with a median of 9.65, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Echo Global Logistics is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ECHO feels like a great value stock at the moment.
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