Are Investors Undervaluing Envista (NVST) 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, 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Envista (NVST). NVST is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 17.7, which compares to its industry's average of 17.82. Over the past 52 weeks, NVST's Forward P/E has been as high as 26.80 and as low as 14.19, with a median of 17.47.

Investors should also note that NVST holds a PEG ratio of 1.05. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NVST's PEG compares to its industry's average PEG of 2.00. Over the last 12 months, NVST's PEG has been as high as 2.68 and as low as 0.90, with a median of 1.13.

Investors should also recognize that NVST has a P/B ratio of 1.11. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. NVST's current P/B looks attractive when compared to its industry's average P/B of 2.53. Over the past 12 months, NVST's P/B has been as high as 1.30 and as low as 0.82, with a median of 1.08.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. NVST has a P/S ratio of 1.51. This compares to its industry's average P/S of 1.72.

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