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Are Investors Undervaluing At Home Group (HOME) 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 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 At Home Group (HOME). HOME is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.05. This compares to its industry's average Forward P/E of 17.69. Over the last 12 months, HOME's Forward P/E has been as high as 22.43 and as low as 6.11, with a median of 11.36.

Investors will also notice that HOME has a PEG ratio of 0.73. 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. HOME's PEG compares to its industry's average PEG of 1. Over the past 52 weeks, HOME's PEG has been as high as 1.20 and as low as 0.35, with a median of 0.66.

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. HOME has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.65.

Finally, investors will want to recognize that HOME has a P/CF ratio of 4.26. 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. HOME's current P/CF looks attractive when compared to its industry's average P/CF of 11.75. Within the past 12 months, HOME's P/CF has been as high as 16.68 and as low as 2.41, with a median of 4.96.

These are just a handful of the figures considered in At Home Group'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 HOME is an impressive value stock right now.

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