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Are Investors Undervaluing JOYY (YY) 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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is JOYY (YY). YY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.73. This compares to its industry's average Forward P/E of 30.80. Over the past year, YY's Forward P/E has been as high as 18.33 and as low as 8.35, with a median of 12.69.

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. YY has a P/S ratio of 1.14. This compares to its industry's average P/S of 2.18.

Finally, our model also underscores that YY has a P/CF ratio of 8.09. 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. YY's P/CF compares to its industry's average P/CF of 24.33. Over the past 52 weeks, YY's P/CF has been as high as 15.36 and as low as 6.04, with a median of 7.72.

Value investors will likely look at more than just these metrics, but the above data helps show that JOYY is likely undervalued currently. And when considering the strength of its earnings outlook, YY sticks out at as one of the market's strongest value stocks.


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