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Are Investors Undervaluing Vipshop Holdings Limited (VIPS) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

One stock to keep an eye on is Vipshop Holdings Limited (VIPS). VIPS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Another notable valuation metric for VIPS is its P/B ratio of 1.42. 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 3.93. Over the past 12 months, VIPS's P/B has been as high as 6.21 and as low as 1.24, with a median of 3.08.

Finally, our model also underscores that VIPS has a P/CF ratio of 6.86. 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. VIPS's current P/CF looks attractive when compared to its industry's average P/CF of 25.88. Within the past 12 months, VIPS's P/CF has been as high as 25.29 and as low as 5.97, with a median of 16.41.

Value investors will likely look at more than just these metrics, but the above data helps show that Vipshop Holdings Limited is likely undervalued currently. And when considering the strength of its earnings outlook, VIPS sticks out at as one of the market's strongest value stocks.

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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