Is Lumber Liquidators Holdings (LL) Stock Undervalued Right Now?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Lumber Liquidators Holdings (LL). LL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.
Investors will also notice that LL has a PEG ratio of 1.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LL's PEG compares to its industry's average PEG of 1.60. Over the last 12 months, LL's PEG has been as high as 1.44 and as low as -17.03, with a median of 0.63.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LL has a P/S ratio of 0.32. This compares to its industry's average P/S of 0.4.
Finally, investors will want to recognize that LL has a P/CF ratio of 7.72. 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. LL's P/CF compares to its industry's average P/CF of 14.42. LL's P/CF has been as high as 11.16 and as low as -9.04, with a median of -5.46, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Lumber Liquidators Holdings is likely undervalued currently. And when considering the strength of its earnings outlook, LL sticks out at as one of the market's strongest value stocks.
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