Chicago, IL – March 13, 2026 – Stocks in this week’s article are like Eni S.p.A. E, Sanmina Corp. SANM, FirstSun Capital Bancorp FSUN, First American Financial Corp. FAF and AXIS Capital Holdings Ltd. AXS.
The price-to-earnings (P/E) multiple enjoys widespread 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. However, even this straightforward, broadly used valuation metric has a few shortcomings.
While P/E enjoys great popularity among value investors, a less-used and more complicated metric called EV-to-EBITDA is sometimes viewed as a better alternative. EV-to-EBITDA gives the true picture of a company’s valuation and earnings potential. It has a more comprehensive approach to valuation.
Eni S.p.A., Sanmina Corp., FirstSun Capital Bancorp, First American Financial Corp. and AXIS Capital Holdings Ltd. are some stocks with impressive EV-to-EBITDA ratios.
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 shortcomings, too. The ratio varies across industries (a high-growth industry typically has a higher multiple and vice versa). It 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 18 stocks that passed the screen:
Eni is among the leading integrated energy players in the world. This Zacks Rank #1 stock has a Value Score of A.
Eni has an expected year-over-year earnings growth rate of 10.3% for 2026. The Zacks Consensus Estimate for E’s 2026 earnings has moved up 13.2% over the past 60 days.
Sanmina is a global provider of electronics contract manufacturing services. 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.
Sanmina has an expected earnings growth rate of 66.5% for fiscal 2026. The consensus estimate for SANM’s fiscal 2026 earnings has been revised 4.4% upward over the past 60 days.
FirstSun Capital Bancorp is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank. This Zacks Rank #2 stock has a Value Score of A.
FirstSun Capital has an expected year-over-year earnings growth rate of 13.8% for 2026. The Zacks Consensus Estimate for FSUN’s 2026 earnings has been revised 9.8% upward over the past 60 days.
First American Financial serves homebuyers and sellers, real estate professionals, loan originators and servicers, commercial property professionals, homebuilders and others involved in residential and commercial property transactions with products and services specific to their needs. This Zacks Rank #2 stock has a Value Score of A.
First American Financial has an expected earnings growth rate of 5% for 2026. The Zacks Consensus Estimate for FAF’s 2026 earnings has been revised 2.9% upward over the past 60 days.
AXIS Capital provides a broad range of specialty insurance and reinsurance solutions to its clients on a worldwide basis. This Zacks Rank #2 stock has a Value Score of B.
AXIS Capital has an expected year-over-year earnings growth rate of 2.5% for 2026. The consensus estimate for AXS’s 2026 earnings has moved up 4.7% over the past 60 days.
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Eni SpA (E) : Free Stock Analysis Report
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
First American Financial Corporation (FAF) : Free Stock Analysis Report
Sanmina Corporation (SANM) : Free Stock Analysis Report
FirstSun Capital Bancorp (FSUN) : Free Stock Analysis Report
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