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Should Value Investors Buy Express Scripts (ESRX) Stock?

Zacks

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 stock to keep an eye on is Express Scripts (ESRX). ESRX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.72, while its industry has an average P/E of 15.04. Over the last 12 months, ESRX’s Forward P/E has been as high as 10.81 and as low as 7.10, with a median of 8.75.


Investors should also note that ESRX holds a PEG ratio of 1.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. ESRX’s industry currently sports an average PEG of 1.23. Within the past year, ESRX’s PEG has been as high as 1.23 and as low as 0.81, with a median of 0.98.

These are only a few of the key metrics included in Express Scripts’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, ESRX looks like an impressive value stock at the moment.


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Zacks Investment Research
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