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Is Dick's Sporting Goods (DKS) a Great Value Stock Right Now?

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Zacks Equity Research
·3 min read
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Dick's Sporting Goods (DKS). DKS 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 15.34, while its industry has an average P/E of 31.10. Over the past 52 weeks, DKS's Forward P/E has been as high as 30.38 and as low as 4.34, with a median of 13.51.

Investors will also notice that DKS has a PEG ratio of 2.73. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DKS's PEG compares to its industry's average PEG of 4.35. Over the last 12 months, DKS's PEG has been as high as 7.45 and as low as 0.72, with a median of 2.45.

Another notable valuation metric for DKS is its P/B ratio of 3.27. 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 attractive against its industry's average P/B of 5.76. Over the past year, DKS's P/B has been as high as 3.27 and as low as 0.81, with a median of 2.16.

Finally, investors should note that DKS has a P/CF ratio of 10.64. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DKS's P/CF compares to its industry's average P/CF of 14.79. DKS's P/CF has been as high as 10.64 and as low as 2.54, with a median of 7.78, all within the past year.

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


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Zacks Investment Research