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Is Universal Health Services (UHS) Stock Undervalued Right Now?

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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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 12.60. This compares to its industry's average Forward P/E of 15.54. Over the past 52 weeks, UHS's Forward P/E has been as high as 15.12 and as low as 10.83, with a median of 13.

Investors will also notice that UHS has a PEG ratio of 0.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. UHS's industry has an average PEG of 1.14 right now. Over the last 12 months, UHS's PEG has been as high as 1.56 and as low as 0.66, with a median of 0.89.

These are only a few of the key metrics included in Universal Health Services'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, UHS looks like an impressive value stock at the moment.


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