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Is Vitamin Shoppe (VSI) Stock Undervalued Right Now?

Zacks Equity Research
Ciena (CIEN) closed at $44.10 in the latest trading session, marking a -0.59% move from the prior day.

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Vitamin Shoppe (VSI). VSI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 6.82, which compares to its industry's average of 16.75. Over the last 12 months, VSI's Forward P/E has been as high as 142.12 and as low as -39.14, with a median of 22.20.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VSI has a P/S ratio of 0.09. This compares to its industry's average P/S of 0.26.

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


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