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Should Value Investors Buy Nu Skin Enterprises (NUS) Stock?

Zacks Equity Research
·3 min read

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Nu Skin Enterprises (NUS). NUS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 16.37 right now. For comparison, its industry sports an average P/E of 34.57. Over the last 12 months, NUS's Forward P/E has been as high as 19.44 and as low as 5.57, with a median of 12.85.

NUS is also sporting a PEG ratio of 2.40. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NUS's PEG compares to its industry's average PEG of 4.23. NUS's PEG has been as high as 11.50 and as low as 0.98, with a median of 2.67, all within the past year.

We should also highlight that NUS has a P/B ratio of 3.56. Investors use the P/B ratio to look at a stock's market value versus 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 7.54. Within the past 52 weeks, NUS's P/B has been as high as 3.64 and as low as 0.80, with a median of 2.57.

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. NUS has a P/S ratio of 1.22. This compares to its industry's average P/S of 2.33.

Finally, our model also underscores that NUS has a P/CF ratio of 12.90. 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. NUS's P/CF compares to its industry's average P/CF of 27.97. Over the past 52 weeks, NUS's P/CF has been as high as 13.44 and as low as 2.79, with a median of 9.89.

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


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