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Is Aaron's (AAN) a Great Value Stock Right Now?

Zacks Equity Research
·2 min read

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.

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 Aaron's (AAN). AAN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.03. This compares to its industry's average Forward P/E of 11.30. Over the past year, AAN's Forward P/E has been as high as 13.21 and as low as 5.94, with a median of 8.91.

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Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AAN has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.51.

Investors could also keep in mind BrightView (BV), an Consumer Services - Miscellaneous stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

BrightView also has a P/B ratio of 1 compared to its industry's price-to-book ratio of 5.97. Over the past year, its P/B ratio has been as high as 1.54, as low as 0.94, with a median of 1.18.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Aaron's and BrightView are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AAN and BV feels like a great value stock at the moment.


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The Aaron's Company, Inc. (AAN) : Free Stock Analysis Report
 
BrightView Holdings, Inc. (BV) : Free Stock Analysis Report
 
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Zacks Investment Research