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Is Griffon (GFF) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 company to watch right now is Griffon (GFF). GFF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 10.94. This compares to its industry's average Forward P/E of 24.19. Over the past year, GFF's Forward P/E has been as high as 24.03 and as low as 6.43, with a median of 14.83.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. GFF has a P/S ratio of 0.45. This compares to its industry's average P/S of 1.05.

These are only a few of the key metrics included in Griffon'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, GFF looks like an impressive value stock at the moment.


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