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Are Investors Undervaluing EZCORP (EZPW) Right Now?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 EZCORP (EZPW - Free Report) . EZPW is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EZPW has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.41.

Finally, investors will want to recognize that EZPW has a P/CF ratio of 8.76. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 20.51. Within the past 12 months, EZPW's P/CF has been as high as 11.01 and as low as 7.66, with a median of 8.73.

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


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