Is BJ's Restaurants (BJRI) a Great Value Stock Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 company to watch right now is BJ's Restaurants (BJRI). BJRI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 17.52, while its industry has an average P/E of 20.78. Over the past year, BJRI's Forward P/E has been as high as 307.89 and as low as 17.16, with a median of 38.52.
We also note that BJRI holds a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BJRI's industry currently sports an average PEG of 1.46. Over the past 52 weeks, BJRI's PEG has been as high as 20.53 and as low as 1.14, with a median of 2.57.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BJRI has a P/S ratio of 0.39. This compares to its industry's average P/S of 0.87.
Finally, investors will want to recognize that BJRI has a P/CF ratio of 6.06. 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 15.81. Within the past 12 months, BJRI's P/CF has been as high as 11.54 and as low as 5.98, with a median of 9.61.
If you're looking for another solid Retail - Restaurants value stock, take a look at Carrols Restaurant Group (TAST). TAST is a # 1 (Strong Buy) stock with a Value score of A.
Carrols Restaurant Group also has a P/B ratio of 1.73 compared to its industry's price-to-book ratio of -22.82. Over the past year, its P/B ratio has been as high as 2.39, as low as 0.43, with a median of 1.09.
These figures are just a handful of the metrics value investors tend to look at, but they help show that BJ's Restaurants and Carrols Restaurant Group are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BJRI and TAST feels like a great value stock at the moment.
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BJ's Restaurants, Inc. (BJRI) : Free Stock Analysis Report
Carrols Restaurant Group, Inc. (TAST) : Free Stock Analysis Report
