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Is Controladora Vuela (VLRS) a Great Value Stock Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Controladora Vuela (VLRS). VLRS is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Another valuation metric that we should highlight is VLRS's P/B ratio of 1.14. The P/B ratio pits a stock's market value against 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 2.63. VLRS's P/B has been as high as 5.61 and as low as 1.08, with a median of 4.76, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. VLRS has a P/S ratio of 0.2. This compares to its industry's average P/S of 0.26.

These are only a few of the key metrics included in Controladora Vuela'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, VLRS looks like an impressive value stock at the moment.


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