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Is Jazz Pharmaceuticals (JAZZ) Stock Undervalued Right Now?

Zacks

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, 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Jazz Pharmaceuticals (JAZZ). JAZZ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.


Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. JAZZ has a P/S ratio of 4.04. This compares to its industry’s average P/S of 6.3.

Finally, we should also recognize that JAZZ has a P/CF ratio of 11.57. This figure highlights a company’s operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 25.04. Within the past 12 months, JAZZ’s P/CF has been as high as 16.59 and as low as 8.10, with a median of 11.57.

These are only a few of the key metrics included in Jazz Pharmaceuticals’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, JAZZ looks like an impressive value stock at the moment.


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