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Is Fossil Group (FOSL) a Great Value Stock Right Now?

Zacks Equity Research

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.

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 stock to keep an eye on is Fossil Group (FOSL). FOSL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.59 right now. For comparison, its industry sports an average P/E of 10.44. Over the past 52 weeks, FOSL's Forward P/E has been as high as 27.61 and as low as 5.86, with a median of 20.81.

We should also highlight that FOSL has a P/B ratio of 1.14. The P/B ratio is used to compare a stock's market value with 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 2.92. Over the past 12 months, FOSL's P/B has been as high as 2.30 and as low as 0.84, with a median of 1.25.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FOSL has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.47.

Finally, investors should note that FOSL has a P/CF ratio of 6.11. 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. FOSL's current P/CF looks attractive when compared to its industry's average P/CF of 6.49. Over the past year, FOSL's P/CF has been as high as 14.20 and as low as -18.65, with a median of 5.47.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Fossil Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FOSL feels like a great value stock at the moment.


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