Are Investors Undervaluing Guess (GES) 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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Guess (GES) is a stock many investors are watching right now. GES is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors should also note that GES holds a PEG ratio of 0.95. 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 industry has an average PEG of 1.16 right now. Within the past year, GES's PEG has been as high as 1.41 and as low as 0.87, with a median of 1.10.
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. GES has a P/S ratio of 0.71. This compares to its industry's average P/S of 0.9.
Finally, we should also recognize that GES has a P/CF ratio of 26.04. 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 stock's P/CF looks attractive against its industry's average P/CF of 42.90. Over the past year, GES's P/CF has been as high as 36.09 and as low as 19.87, with a median of 26.67.
These are just a handful of the figures considered in Guess's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GES is an impressive value stock right now.
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