Should Value Investors Buy AFC Gamma (AFCG) Stock?

Zacks
2024-09-16

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, 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 to watch right now is AFC Gamma (AFCG). AFCG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 4.95, while its industry has an average P/E of 8.64. Over the past year, AFCG's Forward P/E has been as high as 6.53 and as low as 4.15, with a median of 5.65.

Investors should also recognize that AFCG has a P/B ratio of 0.67. 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 stock's P/B looks attractive against its industry's average P/B of 0.93. Over the past 12 months, AFCG's P/B has been as high as 0.84 and as low as 0.55, with a median of 0.75.

Finally, our model also underscores that AFCG has a P/CF ratio of 12.80. 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 29.04. Over the past year, AFCG's P/CF has been as high as 21.54 and as low as 6.28, with a median of 11.17.

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

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