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, 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Guess (GES) is a stock many investors are watching right now. GES is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.36, which compares to its industry's average of 17.51. 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 13.79.
GES is also sporting a PEG ratio of 0.65. 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. GES's PEG compares to its industry's average PEG of 1.34. Within the past year, GES's PEG has been as high as 1.01 and as low as 0.54, with a median of 0.79.
Another valuation metric that we should highlight is GES's P/B ratio of 2.08. The P/B ratio is used to compare a stock's market value with 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 5.98. 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 2.09.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. GES has a P/S ratio of 0.45. This compares to its industry's average P/S of 0.83.
Finally, our model also underscores that GES has a P/CF ratio of 14.53. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 22.12. Within the past 12 months, GES's P/CF has been as high as 32.28 and as low as 10.81, with a median of 17.32.
These are only a few of the key metrics included in Guess'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, GES looks like an impressive value stock at the moment.
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