Is Callaway Golf (ELY) Stock Undervalued 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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Callaway Golf (ELY). ELY 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 16.90, while its industry has an average P/E of 29.46. Over the last 12 months, ELY's Forward P/E has been as high as 20.21 and as low as 13.15, with a median of 15.81.
Investors should also note that ELY holds a PEG ratio of 0.68. 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. ELY's industry has an average PEG of 1.94 right now. Over the past 52 weeks, ELY's PEG has been as high as 0.81 and as low as 0.53, with a median of 0.63.
Investors should also recognize that ELY has a P/B ratio of 2.50. 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 7.14. Over the past 12 months, ELY's P/B has been as high as 2.80 and as low as 1.80, with a median of 2.17.
Finally, our model also underscores that ELY has a P/CF ratio of 17.15. 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. ELY's P/CF compares to its industry's average P/CF of 18.44. Over the past year, ELY's P/CF has been as high as 17.95 and as low as 10.43, with a median of 13.01.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Callaway Golf is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ELY feels like a great value stock at the moment.
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