Should Value Investors Buy Lazard (LAZ) Stock?

Zacks Equity Research
·2-min read

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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 Lazard (LAZ). LAZ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.02, while its industry has an average P/E of 12.32. Over the last 12 months, LAZ's Forward P/E has been as high as 14.02 and as low as 5.48, with a median of 11.09.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LAZ has a P/S ratio of 1.51. This compares to its industry's average P/S of 2.21.

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


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