Is Par Pacific (PARR) Stock Undervalued Right Now?

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 company value investors might notice is Par Pacific (PARR). PARR is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.61 right now. For comparison, its industry sports an average P/E of 10.09. Over the past year, PARR's Forward P/E has been as high as 33.91 and as low as 5.93, with a median of 15.56.

Another notable valuation metric for PARR is its P/B ratio of 1.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.87. Over the past 12 months, PARR's P/B has been as high as 1.63 and as low as 0.58, with a median of 0.80.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PARR has a P/S ratio of 0.24. This compares to its industry's average P/S of 0.41.

These are only a few of the key metrics included in Par Pacific'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, PARR looks like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

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