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.
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is EPAM Systems (EPAM). EPAM is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 13.16, while its industry has an average P/E of 16.91. Over the last 12 months, EPAM's Forward P/E has been as high as 23.27 and as low as 12.64, with a median of 16.57.
EPAM is also sporting a PEG ratio of 1.67. 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. EPAM's PEG compares to its industry's average PEG of 2.02. EPAM's PEG has been as high as 3.77 and as low as 1.61, with a median of 2.30, all within 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. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EPAM has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.49.
These are just a handful of the figures considered in EPAM Systems'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 EPAM is an impressive value stock right now.
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EPAM Systems, Inc. (EPAM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).