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Is SMART Global Holdings, Inc. (SGH) Stock Undervalued Right Now?

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.

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.

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.

SMART Global Holdings, Inc. (SGH) is a stock many investors are watching right now. SGH 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 3.78. This compares to its industry's average Forward P/E of 7.32. Over the past year, SGH's Forward P/E has been as high as 10.96 and as low as 3.78, with a median of 6.51.

SGH is also sporting a PEG ratio of 0.25. 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. SGH's PEG compares to its industry's average PEG of 0.74. SGH's PEG has been as high as 0.73 and as low as 0.25, with a median of 0.46, all within the past year.

Another notable valuation metric for SGH is its P/B ratio of 3.56. 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 4.38. Over the past year, SGH's P/B has been as high as 10.22 and as low as 3.56, with a median of 6.40.

Finally, our model also underscores that SGH has a P/CF ratio of 4.12. 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. SGH's P/CF compares to its industry's average P/CF of 12.95. Over the past 52 weeks, SGH's P/CF has been as high as 25.88 and as low as 4.12, with a median of 11.01.

These are only a few of the key metrics included in SMART Global Holdings, Inc.'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, SGH 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.


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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