Should Value Investors Buy Academy Sports and Outdoors, Inc. (ASO) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Academy Sports and Outdoors, Inc. (ASO). ASO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.10, which compares to its industry's average of 23.56. ASO's Forward P/E has been as high as 11.74 and as low as 7.30, with a median of 9.40, all within the past year.
We should also highlight that ASO has a P/B ratio of 2.69. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 6.40. Within the past 52 weeks, ASO's P/B has been as high as 3.04 and as low as 1.35, with a median of 2.39.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ASO has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.68.
Value investors will likely look at more than just these metrics, but the above data helps show that Academy Sports and Outdoors, Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, ASO sticks out at as one of the market's strongest value stocks.
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