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Are Investors Undervaluing Innoviva (INVA) 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Innoviva (INVA) is a stock many investors are watching right now. INVA is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 10.28 right now. For comparison, its industry sports an average P/E of 16.09. Over the past 52 weeks, INVA's Forward P/E has been as high as 12 and as low as 5.73, with a median of 9.50.

Investors should also recognize that INVA has a P/B ratio of 3.57. 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. INVA's current P/B looks attractive when compared to its industry's average P/B of 6.84. Within the past 52 weeks, INVA's P/B has been as high as 7.50 and as low as 2.40, with a median of 4.44.

Finally, investors will want to recognize that INVA has a P/CF ratio of 7.79. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.51. Over the past 52 weeks, INVA's P/CF has been as high as 9.79 and as low as 2.83, with a median of 3.91.

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


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