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Is G-III Apparel Group (GIII) Stock Undervalued Right Now?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company to watch right now is G-III Apparel Group (GIII). GIII is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 12.56 right now. For comparison, its industry sports an average P/E of 17.65. Over the past year, GIII's Forward P/E has been as high as 22.68 and as low as 8.55, with a median of 14.27.

Investors will also notice that GIII has a PEG ratio of 0.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GIII's PEG compares to its industry's average PEG of 1.20. Over the past 52 weeks, GIII's PEG has been as high as 1.51 and as low as 0.56, with a median of 0.97.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GIII has a P/S ratio of 0.67. This compares to its industry's average P/S of 0.76.

Finally, we should also recognize that GIII has a P/CF ratio of 12. 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 31.71. Over the past year, GIII's P/CF has been as high as 20.53 and as low as 8.56, with a median of 14.13.

These are just a handful of the figures considered in G-III Apparel Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GIII is an impressive value stock right now.


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