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Is America’s Car-Mart (CRMT) Stock Undervalued Right Now?

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is America’s Car-Mart (CRMT). CRMT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.63 right now. For comparison, its industry sports an average P/E of 10.81. Over the last 12 months, CRMT’s Forward P/E has been as high as 15.16 and as low as 4.28, with a median of 11.59.


CRMT is also sporting a PEG ratio of 1.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company’s expected EPS growth rate. CRMT’s industry currently sports an average PEG of 1.76. Over the last 12 months, CRMT’s PEG has been as high as 2.06 and as low as 0.52, with a median of 1.45.

Investors should also recognize that CRMT has a P/B ratio of 1.77. Investors use the P/B ratio to look at a stock’s market value versus its book value, which is defined as total assets minus total liabilities. This stock’s P/B looks solid versus its industry’s average P/B of 1.84. Within the past 52 weeks, CRMT’s P/B has been as high as 2.94 and as low as 0.87, with a median of 2.20.

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


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Zacks Investment Research
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