Is Herc Holdings (HRI) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Herc Holdings (HRI). HRI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HRI has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.17.
Finally, investors will want to recognize that HRI has a P/CF ratio of 2.29. 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. HRI's P/CF compares to its industry's average P/CF of 4.93. Over the past year, HRI's P/CF has been as high as 2.85 and as low as 0.71, with a median of 2.29.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Herc Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HRI 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.