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Is United Continental (UAL) 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.

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.

United Continental (UAL) is a stock many investors are watching right now. UAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.83, which compares to its industry's average of 9.57. Over the past 52 weeks, UAL's Forward P/E has been as high as 12.18 and as low as 7.72, with a median of 9.05.

UAL is also sporting a PEG ratio of 0.41. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UAL's industry currently sports an average PEG of 0.79. Over the last 12 months, UAL's PEG has been as high as 1.98 and as low as 0.39, with a median of 0.44.

We should also highlight that UAL has a P/B ratio of 2.54. Investors use the P/B ratio to look at a stock's market value versus 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 2.55. Within the past 52 weeks, UAL's P/B has been as high as 2.85 and as low as 2.08, with a median of 2.36.

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. UAL has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.62.

Finally, we should also recognize that UAL has a P/CF ratio of 5.50. 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. UAL's current P/CF looks attractive when compared to its industry's average P/CF of 5.82. Over the past year, UAL's P/CF has been as high as 6.04 and as low as 4.27, with a median of 4.88.

These are just a handful of the figures considered in United Continental'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 UAL is an impressive value stock right now.

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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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