Are Investors Undervaluing International Game Technology (IGT) 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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is International Game Technology (IGT). IGT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.17. This compares to its industry's average Forward P/E of 19.88. Over the past 52 weeks, IGT's Forward P/E has been as high as 15.40 and as low as 8.42, with a median of 10.69.

Investors will also notice that IGT has a PEG ratio of 1.12. 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. IGT's industry has an average PEG of 1.77 right now. IGT's PEG has been as high as 1.36 and as low as 0.84, with a median of 1.05, all within the past year.

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. IGT has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.52.

These are just a handful of the figures considered in International Game Technology's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that IGT is an impressive value stock right now.

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