Zacks.com featured highlights include Standard Motor Products, PRA Group, MRC Global, Gibraltar Industries and Edison International

For Immediate ReleaseChicago, IL – April 21, 2025 – Stocks in this week’s article are Standard Motor Products, Inc. SMP, PRA Group, Inc. PRAA, MRC Global Inc. MRC, Gibraltar Industries, Inc. ROCK and Edison International EIX.5 Value Stocks with Enticing EV-to-EBITDA Ratios to Own NowThe price-to-earnings (P/E) multiple enjoys wide-scale popularity among investors seeking stocks trading at a bargain. In addition to being a widely used tool for screening stocks, P/E is a popular metric for working out the fair market value of a firm. But even this ubiquitously used valuation multiple has a few limitations.Although 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.Standard Motor Products, Inc., PRA Group, Inc., MRC Global Inc., Gibraltar Industries, Inc. and Edison International are some stocks with impressive 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 that the P/E ratio does not. For 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. Moreover, 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 when 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 14 stocks that passed the screen:Standard Motors is one of the leading manufacturers and distributors of premium automotive replacement parts for engine management and temperature control systems. This Zacks Rank #1 stock has a Value Score of A.Standard Motors has an expected year-over-year earnings growth rate of 11% for 2025. The Zacks Consensus Estimate for SMP's 2025 earnings has moved up 2.6% over the past 60 days.PRA Group is a global financial and business services company in the Americas, Australia and Europe. This Zacks Rank #1 stock has a Value Score of B. You can see the complete list of today's Zacks #1 Rank stocks here.PRA Group has an expected year-over-year earnings growth rate of 26.3% for 2025. The consensus estimate for PRAA's 2025 earnings has been revised 12.4% upward over the past 60 days.MRC Global is one of the leading distributors of pipes, valves, fittings and related products and services. This Zacks Rank #2 stock has a Value Score of A.MRC Global has an expected earnings growth rate of 54.6% for 2025. The consensus estimate for MRC's 2025 earnings has been revised 3% higher over the past 60 days.Gibraltar Industries manufactures and distributes products to the industrial and buildings market. This Zacks Rank #2 stock has a Value Score of A.Gibraltar Industries has an expected earnings growth rate of 15.5% for 2025. The Zacks Consensus Estimate for ROCK's 2025 earnings has been revised 1% higher over the past 60 days.Edison International is focused on offering clean and reliable energy and energy services through its independent companies. This Zacks Rank #2 stock has a Value Score of A.Edison International has an expected earnings growth rate of 18.9% for 2025. The consensus estimate for EIX's 2025 earnings has moved up 1.7% 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/2450439/5-value-stocks-with-enticing-ev-to-ebitda-ratios-to-own-nowDisclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.About Screen of the WeekZacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.Strong Stocks that Should Be in the NewsMany are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. 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Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Edison International (EIX): Free Stock Analysis Report PRA Group, Inc. (PRAA): Free Stock Analysis Report Standard Motor Products, Inc. (SMP): Free Stock Analysis Report Gibraltar Industries, Inc. (ROCK): Free Stock Analysis Report MRC Global Inc. (MRC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks