Is Primoris Services (PRIM) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 value investors might notice is Primoris Services (PRIM). PRIM is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.55, which compares to its industry's average of 13.27. Over the past 52 weeks, PRIM's Forward P/E has been as high as 11.83 and as low as 7.55, with a median of 10.09.
Another notable valuation metric for PRIM is its P/B ratio of 1.14. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.94. Over the past year, PRIM's P/B has been as high as 1.58 and as low as 1.12, with a median of 1.37.
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. PRIM has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.55.
Finally, investors should note that PRIM has a P/CF ratio of 5.39. 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. PRIM's current P/CF looks attractive when compared to its industry's average P/CF of 9.25. PRIM's P/CF has been as high as 7.10 and as low as 5.27, with a median of 6.23, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Primoris Services is likely undervalued currently. And when considering the strength of its earnings outlook, PRIM sticks out at as one of the market's strongest value stocks.
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