Should Value Investors Buy EZCORP (EZPW) Stock?

Zacks
02-10

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 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.

EZCORP (EZPW) is a stock many investors are watching right now. EZPW is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.46, which compares to its industry's average of 10.08. Over the past 52 weeks, EZPW's Forward P/E has been as high as 10.67 and as low as 8.63, with a median of 9.42.

Another valuation metric that we should highlight is EZPW's P/B ratio of 0.84. 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 solid versus its industry's average P/B of 1.16. EZPW's P/B has been as high as 0.87 and as low as 0.66, with a median of 0.76, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EZPW has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.47.

These are only a few of the key metrics included in EZCORP's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, EZPW looks like an impressive value stock at the moment.

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