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Are Investors Undervaluing United Rentals (URI) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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 to watch right now is United Rentals (URI). URI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.15, which compares to its industry's average of 17.36. Over the last 12 months, URI's Forward P/E has been as high as 17.45 and as low as 10.11, with a median of 13.88.

Investors will also notice that URI has a PEG ratio of 1.05. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. URI's industry currently sports an average PEG of 1.44. Over the last 12 months, URI's PEG has been as high as 2.35 and as low as 0.84, with a median of 1.11.

Finally, we should also recognize that URI has a P/CF ratio of 8.17. 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. URI's current P/CF looks attractive when compared to its industry's average P/CF of 21.23. Within the past 12 months, URI's P/CF has been as high as 8.85 and as low as 3.27, with a median of 6.23.

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


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United Rentals, Inc. (URI): Free Stock Analysis Report
 
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