Is NV5 Global (NVEE) a great pick from the value investor’s perspective right now? Read on to know more.
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put NV5 Global, Inc. NVEE stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks: PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, NV5 Global has a trailing twelve months PE ratio of 23.6, as you can see in the chart below: Image Source: Zacks Investment Research
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 24.7. If we focus on the long-term PE trend, NV5 Global’s current PE level puts it above its midpoint over the past five years. Image Source: Zacks Investment Research
Further, the stock’s PE also compares favorably with its sector’s trailing twelve months PE ratio, which stands at 31.1. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers. Image Source: Zacks Investment Research
We should also point out that NV5 Global has a forward PE ratio (price relative to this year’s earnings) of just 23.3, so we might say that the forward earnings estimates indicate that the company’s share price will likely appreciate in the near future. P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, NV5 Global has a P/S ratio of about 2.2. This is a lower than the S&P 500 average, which comes in at 4.9 right now. However, we can see in the chart below, this is above the highs for this stock in particular over the past few years. Image Source: Zacks Investment Research
If anything, this suggests some level of undervalued trading—at least compared to historical norms. Broad Value Outlook
In aggregate, NV5 Global currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes NV5 Global a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, the P/CF ratio (another great indicator of value) comes in at 13.9, which is better than the industry average of 20.9. Clearly, NVEE is a solid choice on the value front from multiple angles. What About the Stock Overall?
Though NV5 Global might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of A and a Momentum Score of D. This gives NVEE a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >> )
Meanwhile, the company’s recent earnings estimates have been robust at best. The current year has seen one estimate go higher in the past sixty days, while the next year has seen none.
This has had a noticeable impact on the consensus estimate though as the current year and the next year’s consensus estimate has increased by 4.3% and 3%, respectively, in the past two months. You can see the consensus estimate trend and recent price action for the […]
source Should Value Investors Pick NV5 Global (NVEE) Stock Now?