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Cheap Value Buy: Republic Airways (NASDAQ:RJET)
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We look at Republic Airways Holdings Inc. (NASDAQ:RJET) a company in the Services industry which lately stock market players have been interested in, to assess if it provides value for investors considering buying or selling it. Currently Republic Airways Holdings Inc. is trading at $10.13 after moving unchanged 0.00% in the previous day of trading. [Trend Analysis]
RJET is trading with a trailing 12 month P/E multiple of 9.21 and an estimated forward P/E multiple of 6.66. The stock has an estimated 5 year annual growth of 22.46% and a PEG multiple of 0.41.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Republic Airways Holdings Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of RJET. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of RJET being 0.41, we consider Republic Airways Holdings Inc. to likely be underpriced.
This analysis means that value buyers who do not currently hold Republic Airways Holdings Inc. (NASDAQ:RJET) should consider buying and investors currently holding the stock should continue holding.
The mean analyst 12 month target price for Republic Airways Holdings Inc. (NASDAQ:RJET) is currently $15.20 or 50.05% above the current price. Additionally, the stock has been as high as $15.36 and as low as $9.49 in the last 52 weeks. Analysts are estimating that RJET will report earnings per share of $0.34 next quarter.