Is Foot Locker (FL) 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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Foot Locker (FL). FL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.98 right now. For comparison, its industry sports an average P/E of 13.06. Over the past 52 weeks, FL's Forward P/E has been as high as 9.16 and as low as 4.75, with a median of 7.02.
Investors should also recognize that FL has a P/B ratio of 1.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.12. Within the past 52 weeks, FL's P/B has been as high as 1.44 and as low as 0.71, with a median of 0.94.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FL has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.44.
Finally, investors will want to recognize that FL has a P/CF ratio of 5.82. 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. FL's P/CF compares to its industry's average P/CF of 8.14. Over the past 52 weeks, FL's P/CF has been as high as 5.94 and as low as 2.28, with a median of 4.08.
Urban Outfitters (URBN) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. URBN is a # 2 (Buy) stock with a Value grade of A.
Urban Outfitters is trading at a forward earnings multiple of 12.70 at the moment, with a PEG ratio of 0.71. This compares to its industry's average P/E of 13.06 and average PEG ratio of 0.88.
URBN's price-to-earnings ratio has been as high as 13.98 and as low as 5.92, with a median of 9.41, while its PEG ratio has been as high as 0.78 and as low as 0.33, with a median of 0.52, all within the past year.
Furthermore, Urban Outfitters holds a P/B ratio of 1.50 and its industry's price-to-book ratio is 3.12. URBN's P/B has been as high as 1.68, as low as 1.01, with a median of 1.28 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Foot Locker and Urban Outfitters are likely undervalued currently. And when considering the strength of its earnings outlook, FL and URBN sticks out as one of the market's strongest value stocks.
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Foot Locker, Inc. (FL) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
