Are Investors Undervaluing Herc Holdings (HRI) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
Herc Holdings (HRI) is a stock many investors are watching right now. HRI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.76. This compares to its industry's average P/S of 1.34.
Finally, we should also recognize that HRI has a P/CF ratio of 2.52. 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 current P/CF looks attractive when compared to its industry's average P/CF of 4.93. HRI's P/CF has been as high as 2.85 and as low as 0.71, with a median of 2.27, 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 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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