Are Investors Undervaluing Citi Trends (CTRN) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Citi Trends (CTRN). CTRN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.50, which compares to its industry's average of 14.56. Over the past 52 weeks, CTRN's Forward P/E has been as high as 35.21 and as low as 10.14, with a median of 16.36.
Another notable valuation metric for CTRN is its P/B ratio of 4.63. Investors use the P/B ratio to look at a stock's market value versus 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 5.25. CTRN's P/B has been as high as 6.73 and as low as 1.68, with a median of 4.95, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CTRN has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.7.
These are just a handful of the figures considered in Citi Trends's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CTRN is an impressive value stock right now.
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Citi Trends, Inc. (CTRN): Free Stock Analysis Report
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