Is Academy Sports and Outdoors, Inc. (ASO) Stock Undervalued 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...
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ASO has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.65.
Finally, we should also recognize that ASO has a P/CF ratio of 6.51. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.34. ASO's P/CF has been as high as 7.26 and as low as 4.90, with a median of 6.04, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Academy Sports and Outdoors, Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ASO feels like a great value stock at the moment.
Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative.See Zacks’ Hottest Tech IPOs Now >>
Want 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
Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report
To read this article on Zacks.com click here.