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Is Caleres Inc. (CAL) a Great Value Stock Right Now?

Zacks Equity Research

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 the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Caleres Inc. (CAL). CAL is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.81, which compares to its industry's average of 24.78. Over the past year, CAL's Forward P/E has been as high as 14.58 and as low as 5.76, with a median of 10.73.

We also note that CAL holds a PEG ratio of 1.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CAL's PEG compares to its industry's average PEG of 1.91.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CAL has a P/S ratio of 0.31. This compares to its industry's average P/S of 0.87.

Finally, investors should note that CAL has a P/CF ratio of 16.47. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 25.44. Within the past 12 months, CAL's P/CF has been as high as 21.59 and as low as 7.66, with a median of 14.01.

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


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