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Is Dick's Sporting Goods (DKS) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Dick's Sporting Goods (DKS) is a stock many investors are watching right now. DKS is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 14.25, which compares to its industry's average of 19.65. Over the last 12 months, DKS's Forward P/E has been as high as 30.38 and as low as 4.34, with a median of 12.71.

Another notable valuation metric for DKS is its P/B ratio of 2.67. 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 5.76. DKS's P/B has been as high as 2.70 and as low as 0.81, with a median of 2.07, over the past year.

Finally, investors will want to recognize that DKS has a P/CF ratio of 8.97. 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 14.79. Within the past 12 months, DKS's P/CF has been as high as 10.10 and as low as 2.54, with a median of 6.79.

These are only a few of the key metrics included in Dick's Sporting Goods's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DKS looks like an impressive value stock at the moment.


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