Zacks.com featured highlights include El Pollo Loco, EZCORP, OppFi, Lincoln National and American Assets Trust

For Immediate ReleaseChicago, IL – December 9, 2024 – Stocks in this week’s article are El Pollo Loco Holdings, Inc. LOCO, EZCORP, Inc. EZPW, OppFi Inc. OPFI, Lincoln National Corp. LNC and American Assets Trust, Inc. AAT.5 Value Stocks with Exciting EV-to-EBITDA Ratios to Snap UpThe price-to-earnings (P/E) ratio is broadly considered the yardstick for evaluating the fair market value of a stock. It is preferred by many investors while handpicking stocks trading at attractive prices. However, even this universally used valuation multiple is not without its limitations.While P/E is the most popular valuation metric, a more complicated multiple called EV-to-EBITDA works even better. Often considered a better alternative to P/E, it gives the true picture of a company’s valuation and earnings potential, and has a more complete approach to valuation. While P/E considers a firm’s equity portion, EV-to-EBITDA determines its total value.El Pollo Loco Holdings, Inc., EZCORP, Inc., OppFi Inc., Lincoln National Corp. and American Assets Trust, Inc. are some stocks with attractive EV-to-EBITDA ratios.Is EV-to-EBITDA a Better Substitute to P/E?EV-to-EBITDA is essentially the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company’s market capitalization, its debt and preferred stock minus cash and cash equivalents. EBITDA, the other component of the multiple, gives a better idea of a company’s profitability as it removes the impact of non-cash expenses like depreciation and amortization that reduce net earnings. It is also often used as a proxy for cash flows.Just like P/E, the lower the EV-to-EBITDA ratio, the more attractive it is. A low EV-to-EBITDA ratio could signal that a stock is potentially undervalued. EV-to-EBITDA takes into account the debt on a company’s balance sheet, which the P/E ratio does not. Due to this reason, EV-to-EBITDA is generally used to value the potential acquisition targets as it shows the amount of debt the acquirer has to assume. Stocks boasting a low EV-to-EBITDA multiple could be seen as attractive takeover candidates.Another shortcoming of P/E is that it can’t be used to value a loss-making firm. A company’s earnings are also subject to accounting estimates and management manipulation. On the other hand, EV-to-EBITDA is difficult to manipulate and can also be used to value loss-making but EBITDA-positive companies. EV-to-EBITDA is also a useful tool in measuring the value of firms that are highly leveraged and have a high degree of depreciation. It can be used to compare companies with different levels of debt.But EV-to-EBITDA has its limitations, too. The ratio varies across industries (a high-growth industry typically has a higher multiple and vice versa) and is usually not appropriate while comparing stocks in different industries, given their diverse capital requirements.A strategy solely based on EV-to-EBITDA might not yield the desired results. However, you can club it with the other major ratios in your stock-investing toolbox, such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen value stocks.Here are our five picks out of the nine stocks that passed the screen:El Pollo Loco develops, franchises, licenses and operates quick-service restaurants under the name El Pollo Loco. This Zacks Rank #1 stock has a Value Score of A.El Pollo Loco has an expected year-over-year earnings growth rate of 16.9% for 2024. The Zacks Consensus Estimate for LOCO’s 2024 earnings has been revised 3.8% upward over the past 60 days.EZCORP is engaged in establishing, acquiring and operating pawnshops that function as convenient sources of consumer credit and value-oriented specialty retailers of primarily previously owned merchandise. This Zacks Rank #2 stock has a Value Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.EZCORP has an expected year-over-year earnings growth rate of 12.5% for fiscal 2025. The consensus estimate for EZPW’s fiscal 2025 earnings has been revised 2.4% upward over the past 60 days.OppFi is a tech-enabled specialty finance platform that powers community banks to help everyday consumers gain access to credit. This Zacks Rank #2 stock has a Value Score of A.OppFi has an expected year-over-year earnings growth rate of 68.6% for 2024. The Zacks Consensus Estimate for OPFI’s 2024 earnings has been revised 16.2% upward over the past 60 days.Lincoln National is a diversified life insurance and investment management company. This Zacks Rank #2 stock has a Value Score of B.Lincoln National has an expected year-over-year earnings growth rate of 28.5% for 2024. The Zacks Consensus Estimate for LNC’s 2024 earnings has been revised 15.5% upward over the past 60 days.American Assets Trust is a vertically integrated real estate investment trust that acquires, develops and manages premier office, retail and residential properties throughout the United States. This Zacks Rank #2 stock has a Value Score of B.American Assets Trust has an expected year-over-year earnings growth rate of 5.4% for 2024. The consensus estimate for AAT’s 2024 earnings has been revised 9.1% upward over the past 60 days.You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.Click here to sign up for a free trial to the Research Wizard today.For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2380000/5-value-stocks-with-exciting-ev-to-ebitda-ratios-to-snap-up-nowJoin us on Facebook:  https://www.facebook.com/ZacksInvestmentResearchZacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Contact: Jim GiaquintoCompany: Zacks.comPhone: 312-265-9268Email: pr@zacks.comVisit: https://www.zacks.com/Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lincoln National Corporation (LNC): Free Stock Analysis Report EZCORP, Inc. (EZPW): Free Stock Analysis Report American Assets Trust, Inc. (AAT): Free Stock Analysis Report El Pollo Loco Holdings, Inc. (LOCO): Free Stock Analysis Report OppFi Inc. (OPFI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks