Should Value Investors Buy Navient (NAVI) 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Navient (NAVI). NAVI is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 5.11. This compares to its industry's average Forward P/E of 7.93. Over the past year, NAVI's Forward P/E has been as high as 6.98 and as low as 4.19, with a median of 5.82.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. NAVI has a P/S ratio of 0.56. This compares to its industry's average P/S of 1.38.

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

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