Are Investors Undervaluing Bloomin' Brands (BLMN) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Bloomin' Brands (BLMN). BLMN 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 9.16 right now. For comparison, its industry sports an average P/E of 25.38. Over the past year, BLMN's Forward P/E has been as high as 10.30 and as low as 6.40, with a median of 8.37.
Investors should also note that BLMN holds a PEG ratio of 0.78. 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. BLMN's industry has an average PEG of 1.84 right now. Over the last 12 months, BLMN's PEG has been as high as 0.78 and as low as 0.63, with a median of 0.71.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. BLMN has a P/S ratio of 0.54. This compares to its industry's average P/S of 1.08.
Finally, investors should note that BLMN has a P/CF ratio of 8.49. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 20.43. Over the past 52 weeks, BLMN's P/CF has been as high as 8.99 and as low as 5.49, with a median of 7.42.
If you're looking for another solid Retail - Restaurants value stock, take a look at Dave & Buster's Entertainment (PLAY). PLAY is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Dave & Buster's Entertainment are currently trading at a forward earnings multiple of 11.26 and a PEG ratio of 0.68 compared to its industry's P/E and PEG ratios of 25.38 and 1.84, respectively.
Over the past year, PLAY's P/E has been as high as 16.31, as low as 8.58, with a median of 10.79; its PEG ratio has been as high as 0.81, as low as 0.57, with a median of 0.71 during the same time period.
Additionally, Dave & Buster's Entertainment has a P/B ratio of 5.94 while its industry's price-to-book ratio sits at -23.65. For PLAY, this valuation metric has been as high as 6.18, as low as 3.93, with a median of 4.91 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Bloomin' Brands and Dave & Buster's Entertainment are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BLMN and PLAY feels like a great value stock at the moment.
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Bloomin' Brands, Inc. (BLMN) : Free Stock Analysis Report
Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report
