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Are Investors Undervaluing Bloomin' Brands (BLMN) Right Now?

Zacks Equity Research

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.29. This compares to its industry's average Forward P/E of 26.17. BLMN's Forward P/E has been as high as 14.22 and as low as 9.25, with a median of 12.16, all within the past year.

We also note that BLMN holds a PEG ratio of 1.35. 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. BLMN's PEG compares to its industry's average PEG of 2.35. Over the past 52 weeks, BLMN's PEG has been as high as 1.48 and as low as 0.96, with a median of 1.25.

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. BLMN has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.95.

Finally, investors should note that BLMN has a P/CF ratio of 5.11. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.37. Over the past 52 weeks, BLMN's P/CF has been as high as 6.03 and as low as 3.72, with a median of 4.89.

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


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