Are Investors Undervaluing Guess (GES) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One stock to keep an eye on is Guess (GES). GES is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.75 right now. For comparison, its industry sports an average P/E of 15.62. Over the last 12 months, GES's Forward P/E has been as high as 17.63 and as low as 9.42, with a median of 14.09.
Investors should also note that GES holds a PEG ratio of 0.61. 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. GES's PEG compares to its industry's average PEG of 1.20. Over the past 52 weeks, GES's PEG has been as high as 1.01 and as low as 0.54, with a median of 0.81.
We should also highlight that GES has a P/B ratio of 2.13. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.21. Over the past 12 months, GES's P/B has been as high as 2.62 and as low as 1.58, with a median of 2.07.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GES has a P/S ratio of 0.44. This compares to its industry's average P/S of 0.85.
Finally, our model also underscores that GES has a P/CF ratio of 13.61. 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 22.94. Over the past year, GES's P/CF has been as high as 32.28 and as low as 10.81, with a median of 18.26.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Guess is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GES feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.