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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
XP (XP) is a stock many investors are watching right now. XP is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 10.43, while its industry has an average P/E of 16.67. Over the past year, XP's Forward P/E has been as high as 12.34 and as low as 1.97, with a median of 9.21.
XP is also sporting a PEG ratio of 0.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. XP's industry has an average PEG of 1.06 right now. Over the last 12 months, XP's PEG has been as high as 1.03 and as low as 0.16, with a median of 0.68.
Investors should also recognize that XP has a P/B ratio of 2.7. 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 2.76. XP's P/B has been as high as 3.08 and as low as 1.60, with a median of 2.34, over the past year.
Finally, we should also recognize that XP has a P/CF ratio of 11.68. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. XP's P/CF compares to its industry's average P/CF of 33.98. Within the past 12 months, XP's P/CF has been as high as 12.54 and as low as 6.71, with a median of 9.85.
These are just a handful of the figures considered in XP's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that XP is an impressive value stock right now.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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