Is ADT (ADT) a Great Value Stock Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 stock to keep an eye on is ADT (ADT). ADT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

ADT is also sporting a PEG ratio of 1.30. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ADT's PEG compares to its industry's average PEG of 1.31. Over the past 52 weeks, ADT's PEG has been as high as 1.40 and as low as 1.16, with a median of 1.21.

We should also highlight that ADT has a P/B ratio of 1.97. 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 solid versus its industry's average P/B of 3.05. Within the past 52 weeks, ADT's P/B has been as high as 3.06 and as low as 1.66, with a median of 2.11.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ADT has a P/S ratio of 1.13. This compares to its industry's average P/S of 2.13.

Finally, investors will want to recognize that ADT has a P/CF ratio of 3.77. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ADT's current P/CF looks attractive when compared to its industry's average P/CF of 13.88. Over the past 52 weeks, ADT's P/CF has been as high as 5.78 and as low as 3.18, with a median of 4.15.

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

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