Is Guess (GES) a Great Value Stock Right Now?
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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Guess (GES) is a stock many investors are watching right now. GES is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.37, which compares to its industry's average of 17.24. Over the past 52 weeks, GES's Forward P/E has been as high as 17.61 and as low as 9.42, with a median of 13.42.
Investors will also notice that GES has a PEG ratio of 0.59. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GES's PEG compares to its industry's average PEG of 1.31. Over the past 52 weeks, GES's PEG has been as high as 1.01 and as low as 0.54, with a median of 0.77.
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. GES has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.76.
Finally, investors will want to recognize that GES has a P/CF ratio of 13.80. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 21.95. Over the past year, GES's P/CF has been as high as 32.28 and as low as 10.81, with a median of 16.68.
Value investors will likely look at more than just these metrics, but the above data helps show that Guess is likely undervalued currently. And when considering the strength of its earnings outlook, GES sticks out at as one of the market's strongest value stocks.
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