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Is Skechers (SKX) Stock Undervalued Right Now?

Zacks Equity Research

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.

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.

Skechers (SKX) is a stock many investors are watching right now. SKX is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.51, which compares to its industry's average of 23.51. SKX's Forward P/E has been as high as 17.53 and as low as 11.24, with a median of 14.62, all within the past year.

We also note that SKX holds a PEG ratio of 0.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SKX's industry currently sports an average PEG of 1.81. Within the past year, SKX's PEG has been as high as 2.50 and as low as 0.94, with a median of 1.96.

Finally, we should also recognize that SKX has a P/CF ratio of 12.27. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. SKX's P/CF compares to its industry's average P/CF of 23.76. SKX's P/CF has been as high as 16.04 and as low as 8.49, with a median of 12.45, all within the past year.

These are just a handful of the figures considered in Skechers'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 SKX is an impressive value stock right now.


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