Should Value Investors Buy Elekta (EKTAY) Stock?

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 company value investors might notice is Elekta (EKTAY). EKTAY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 12.36, while its industry has an average P/E of 28.09. EKTAY's Forward P/E has been as high as 17.56 and as low as 10.92, with a median of 14.47, all within the past year.

Investors should also recognize that EKTAY has a P/B ratio of 1.99. The P/B is a method of comparing a stock's market value to 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 3.68. Over the past 12 months, EKTAY's P/B has been as high as 3.11 and as low as 1.77, with a median of 2.32.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. EKTAY has a P/S ratio of 1.17. This compares to its industry's average P/S of 2.6.

Finally, investors will want to recognize that EKTAY has a P/CF ratio of 9.19. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 21.13. Over the past year, EKTAY's P/CF has been as high as 13.78 and as low as 8.15, with a median of 10.54.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Elekta is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EKTAY feels like a great value stock at the moment.

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

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