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Is Victory Capital Holdings (VCTR) Stock Undervalued Right Now?

·3 min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Victory Capital Holdings (VCTR) is a stock many investors are watching right now. VCTR is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.33, while its industry has an average P/E of 13.32. Over the past year, VCTR's Forward P/E has been as high as 8.63 and as low as 4.94, with a median of 6.47.

Another notable valuation metric for VCTR is its P/B ratio of 2.66. 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. VCTR's current P/B looks attractive when compared to its industry's average P/B of 2.71. Within the past 52 weeks, VCTR's P/B has been as high as 3.33 and as low as 2.03, with a median of 2.66.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. VCTR has a P/S ratio of 2.72. This compares to its industry's average P/S of 3.09.

Finally, we should also recognize that VCTR has a P/CF ratio of 8.91. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.08. Over the past year, VCTR's P/CF has been as high as 11.16 and as low as 6.83, with a median of 9.12.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Victory Capital Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VCTR feels like a great value stock at the moment.


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