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Are Investors Undervaluing Hibbett Sports (HIBB) Right Now?

Zacks Equity Research

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.

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 stock to keep an eye on is Hibbett Sports (HIBB). HIBB is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.02. This compares to its industry's average Forward P/E of 14. Over the past year, HIBB's Forward P/E has been as high as 15.06 and as low as 7.76, with a median of 10.56.

Investors will also notice that HIBB has a PEG ratio of 1.39. 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. HIBB's PEG compares to its industry's average PEG of 1.45. Over the last 12 months, HIBB's PEG has been as high as 5.45 and as low as 0.96, with a median of 1.36.

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. HIBB has a P/S ratio of 0.33. This compares to its industry's average P/S of 0.36.

Finally, our model also underscores that HIBB has a P/CF ratio of 5.63. 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 19.34. Over the past 52 weeks, HIBB's P/CF has been as high as 8.84 and as low as 4.40, with a median of 5.94.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Hibbett Sports is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HIBB feels like a great value stock at the moment.


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