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Is Carrizo Oil (CRZO) Stock Undervalued Right Now?

Zacks Equity Research

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 Carrizo Oil (CRZO). CRZO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

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Another notable valuation metric for CRZO is its P/B ratio of 0.78. 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. CRZO's current P/B looks attractive when compared to its industry's average P/B of 1.78. Within the past 52 weeks, CRZO's P/B has been as high as 5.60 and as low as 0.75, with a median of 1.17.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. CRZO has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.1.

These are just a handful of the figures considered in Carrizo Oil'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 CRZO is an impressive value stock right now.


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