Are Investors Undervaluing VAREX IMAGING (VREX) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

VAREX IMAGING (VREX) is a stock many investors are watching right now. VREX is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.78, while its industry has an average P/E of 16.20. Over the last 12 months, VREX's Forward P/E has been as high as 26.48 and as low as 11.49, with a median of 18.40.

We should also highlight that VREX has a P/B ratio of 1.08. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. VREX's current P/B looks attractive when compared to its industry's average P/B of 2.28. Over the past year, VREX's P/B has been as high as 1.24 and as low as 0.50, with a median of 0.94.

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

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This article originally published on Zacks Investment Research (zacks.com).

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