Should Value Investors Buy Skechers (SKX) Stock?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company to watch right now is Skechers (SKX). SKX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.61 right now. For comparison, its industry sports an average P/E of 24.56. Over the past 52 weeks, SKX's Forward P/E has been as high as 19.13 and as low as 11.91, with a median of 14.63.
SKX is also sporting a PEG ratio of 0.54. 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 1.40. Over the last 12 months, SKX's PEG has been as high as 0.57 and as low as 0.43, with a median of 0.46.
Finally, our model also underscores that SKX has a P/CF ratio of 12.67. 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. SKX's P/CF compares to its industry's average P/CF of 23.56. SKX's P/CF has been as high as 15.03 and as low as 7.31, with a median of 12.98, all within the past year.
These are only a few of the key metrics included in Skechers's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, SKX looks like an impressive value stock at the moment.
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Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
