Is United Rentals (URI) a Great Value Stock 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is United Rentals (URI). URI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.33 right now. For comparison, its industry sports an average P/E of 11.38. Over the past 52 weeks, URI's Forward P/E has been as high as 11.37 and as low as 4.87, with a median of 7.89.
Investors will also notice that URI has a PEG ratio of 0.36. 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. URI's industry has an average PEG of 0.91 right now. URI's PEG has been as high as 0.61 and as low as 0.27, with a median of 0.48, all within the past year.
Finally, investors should note that URI has a P/CF ratio of 3.72. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. URI's P/CF compares to its industry's average P/CF of 13.20. Over the past year, URI's P/CF has been as high as 5.30 and as low as 2.43, with a median of 3.96.
These are only a few of the key metrics included in United Rentals's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, URI looks like an impressive value stock at the moment.
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