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Is Skechers (SKX) Stock Undervalued Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Skechers (SKX) is a stock many investors are watching right now. SKX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 14.95. This compares to its industry's average Forward P/E of 26.18. Over the last 12 months, SKX's Forward P/E has been as high as 17.53 and as low as 11.24, with a median of 14.51.

Investors should also note that SKX holds a PEG ratio of 1. 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. SKX's industry currently sports an average PEG of 2.09. Over the past 52 weeks, SKX's PEG has been as high as 2.50 and as low as 0.79, with a median of 1.96.

Finally, we should also recognize that SKX has a P/CF ratio of 13.32. 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. SKX's P/CF compares to its industry's average P/CF of 27.74. Within the past 12 months, SKX's P/CF has been as high as 15.99 and as low as 8.49, with a median of 12.27.

These are only a few of the key metrics included in Skechers'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, SKX looks like an impressive 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.

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