Is Skechers (SKX) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 to watch right now is Skechers (SKX). SKX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 11.81. This compares to its industry's average Forward P/E of 21.22. Over the past 52 weeks, SKX's Forward P/E has been as high as 22.73 and as low as 11.62, with a median of 14.91.
Investors should also note that SKX holds a PEG ratio of 1.69. 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. SKX's PEG compares to its industry's average PEG of 1.83. Over the past 52 weeks, SKX's PEG has been as high as 2.23 and as low as 0.66, with a median of 1.27.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SKX has a P/S ratio of 0.78. This compares to its industry's average P/S of 0.8.
Finally, investors will want to recognize that SKX has a P/CF ratio of 12.21. 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. SKX's current P/CF looks attractive when compared to its industry's average P/CF of 33.88. Over the past 52 weeks, SKX's P/CF has been as high as 23.44 and as low as 12.01, with a median of 15.66.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Skechers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SKX feels like a great value stock at the moment.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
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