Is Caesars Entertainment (CZR) stock undervalued right now?

While Zacks Rank’s proven emphasis is 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 always look at trends in value, growth and momentum to uncover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven successful in all types of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks they believe are undervalued by the broader market.

In addition to Zacks Rank, investors looking for stocks with specific characteristics can use our style scoring system. Naturally, value investors will be most interested in the “Value” category of the system. Stocks with “A” grades for value and high Zacks ranks are among the best value stocks available at any given time.

Caesars Entertainment (CZR) it’s a stock that many investors are eyeing right now. CZR currently holds a Zacks grade of #2 (Buy) and a value grade of A.

Another valuation metric we should highlight is CZR’s P/B ratio of 2.80. P/B is a method of comparing the market value of a stock to its book value, which is defined as total assets minus total liabilities. CZR’s current P/B looks attractive compared to its industry average P/B of 3.96. CZR’s P/B was 4.50 and 1.78, with a median of 2.92, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing the price of a stock by the company’s sales. Some people prefer this metric because sales are harder to manipulate in an income statement. This means that it may be a truer performance indicator. CZR has a P/S ratio of 1.01. This compares to its industry average P/S of 1.24.

RCI Hospitality (RICK) could be another strong stock of leisure and recreation services to add to your list. RICK is a share n. 2 (purchase) with a value grade of A.

RCI Hospitality is currently trading with a forward P/E ratio of 14.47 while its PEG ratio stands at 1.21. Both of the company’s metrics compare favorably with its industry average P/E of 40.89 and average PEG ratio of 2.46.

Over the past 12 months, RICK’s P/E was 18.45, low of 8.83, with a median of 12.08, and his PEG ratio was 1.54, low of 0.74, with a median of 1.01.

In addition, RCI Hospitality has a P/B ratio of 3.40 and its industry price to book ratio is 3.96. RICK’s P/B hit a high of 3.95, a low of 1.94, with a median of 2.73 over the past 12 months.

These figures are just a handful of the metrics investors tend to consider, but they help show that Caesars Entertainment and RCI Hospitality are likely undervalued right now. Considering this, plus the strength of its earnings outlook, CZR and RICK feel like very valuable stocks at the moment.

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Caesars Entertainment, Inc. (CZR): Free Stock Analysis Report

RCI Hospitality Holdings, Inc. (RICK): Complimentary Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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