Is Foot Locker (FL) a Great Value Stock Right Now?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Foot Locker (FL). FL is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.63, while its industry has an average P/E of 10.64. Over the past year, FL's Forward P/E has been as high as 12.85 and as low as 6.56, with a median of 10.33.
Investors will also notice that FL has a PEG ratio of 0.89. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FL's PEG compares to its industry's average PEG of 1.04. Over the last 12 months, FL's PEG has been as high as 1.74 and as low as 0.66, with a median of 1.18.
Another valuation metric that we should highlight is FL's P/B ratio of 1.94. 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 stock's P/B looks solid versus its industry's average P/B of 3.04. Over the past year, FL's P/B has been as high as 2.90 and as low as 1.48, with a median of 2.34.
Finally, we should also recognize that FL has a P/CF ratio of 7.05. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.79. FL's P/CF has been as high as 13.08 and as low as 5.40, with a median of 8.90, all within the past year.
These are just a handful of the figures considered in Foot Locker's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FL is an impressive value stock right now.
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