Is LCI Industries (LCII) a Great Value Stock 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
LCI Industries (LCII) is a stock many investors are watching right now. LCII 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 7.41. This compares to its industry's average Forward P/E of 19.86. Over the last 12 months, LCII's Forward P/E has been as high as 14.53 and as low as 6.13, with a median of 8.50.
Another notable valuation metric for LCII is its P/B ratio of 2.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.33. Within the past 52 weeks, LCII's P/B has been as high as 3.96 and as low as 1.96, with a median of 2.66.
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. LCII has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.76.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LCI Industries is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LCII feels like a great value stock at the moment.
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