Is Kraton Performance Polymers (KRA) Stock Undervalued Right Now?

Zacks Equity Research
·2-min read

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Kraton Performance Polymers (KRA) is a stock many investors are watching right now. KRA 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 30.14, which compares to its industry's average of 30.23. KRA's Forward P/E has been as high as 32.77 and as low as 4.02, with a median of 16.50, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KRA has a P/S ratio of 0.58. This compares to its industry's average P/S of 1.66.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Kraton Performance Polymers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KRA feels like a great value stock at the moment.


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