Is Meritor (MTOR) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 value investors might notice is Meritor (MTOR). MTOR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.21. This compares to its industry's average Forward P/E of 10.79. Over the past 52 weeks, MTOR's Forward P/E has been as high as 7.71 and as low as 4.75, with a median of 6.50.
Finally, our model also underscores that MTOR has a P/CF ratio of 6.18. 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. MTOR's P/CF compares to its industry's average P/CF of 6.41. MTOR's P/CF has been as high as 8.91 and as low as 4.21, with a median of 5.36, all within the past year.
These are only a few of the key metrics included in Meritor'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, MTOR looks like an impressive 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.