Are Investors Undervaluing BJ's Wholesale Club (BJ) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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 BJ's Wholesale Club (BJ). BJ is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that BJ has a PEG ratio of 0.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BJ's PEG compares to its industry's average PEG of 1.04. Over the past 52 weeks, BJ's PEG has been as high as 1.91 and as low as 0.98, with a median of 1.25.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BJ has a P/S ratio of 0.38. This compares to its industry's average P/S of 1.03.
These are only a few of the key metrics included in BJ's Wholesale Club'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, BJ looks like an impressive value stock at the moment.
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BJs Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report
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