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Is BJ's Restaurants (BJRI) Stock Undervalued Right Now?

Zacks Equity Research

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 value investors might notice is BJ's Restaurants (BJRI). BJRI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 17.59, while its industry has an average P/E of 26.04. Over the last 12 months, BJRI's Forward P/E has been as high as 33.61 and as low as 17.27, with a median of 22.10.

Investors should also note that BJRI holds a PEG ratio of 1.21. 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 2.23. Over the last 12 months, BJRI's PEG has been as high as 2.20 and as low as 1.19, with a median of 1.51.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BJRI has a P/S ratio of 0.73. This compares to its industry's average P/S of 0.93.

Finally, we should also recognize that BJRI has a P/CF ratio of 7.54. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. BJRI's P/CF compares to its industry's average P/CF of 19.27. Over the past year, BJRI's P/CF has been as high as 12.76 and as low as 7.33, with a median of 9.19.

Value investors will likely look at more than just these metrics, but the above data helps show that BJ's Restaurants is likely undervalued currently. And when considering the strength of its earnings outlook, BJRI sticks out at as one of the market's strongest value stocks.

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