Are Investors Undervaluing Hibbett Sports (HIBB) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 Hibbett Sports (HIBB). HIBB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 15.27, while its industry has an average P/E of 22.35. Over the past 52 weeks, HIBB's Forward P/E has been as high as 21.02 and as low as 2.93, with a median of 9.95.
HIBB is also sporting a PEG ratio of 1.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HIBB's industry currently sports an average PEG of 3.12. Within the past year, HIBB's PEG has been as high as 2.91 and as low as 0.24, with a median of 0.89.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HIBB has a P/S ratio of 0.35. This compares to its industry's average P/S of 0.41.
Value investors will likely look at more than just these metrics, but the above data helps show that Hibbett Sports is likely undervalued currently. And when considering the strength of its earnings outlook, HIBB sticks out at as one of the market's strongest value stocks.
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