Should Value Investors Buy The Greenbrier Companies (GBX) Stock?

Zacks
2024-12-03

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company value investors might notice is The Greenbrier Companies (GBX). GBX is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 12.88 right now. For comparison, its industry sports an average P/E of 15.06. Over the past year, GBX's Forward P/E has been as high as 14.07 and as low as 10.06, with a median of 12.

We should also highlight that GBX has a P/B ratio of 1.38. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.24. Within the past 52 weeks, GBX's P/B has been as high as 1.38 and as low as 0.80, with a median of 1.05.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GBX has a P/S ratio of 0.6. This compares to its industry's average P/S of 1.43.

Finally, investors should note that GBX has a P/CF ratio of 8.16. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.15. GBX's P/CF has been as high as 8.17 and as low as 5.45, with a median of 7.02, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that The Greenbrier Companies is likely undervalued currently. And when considering the strength of its earnings outlook, GBX sticks out at as one of the market's strongest value stocks.

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