Is Nordstrom (JWN) 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.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Nordstrom (JWN). JWN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 11.52, which compares to its industry's average of 14.30. Over the past year, JWN's Forward P/E has been as high as 18.30 and as low as 11.32, with a median of 14.27.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. JWN has a P/S ratio of 0.43. This compares to its industry's average P/S of 0.56.
Finally, we should also recognize that JWN has a P/CF ratio of 6.33. 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 7.87. JWN's P/CF has been as high as 10.75 and as low as 6.19, with a median of 8.03, all within the past year.
These are only a few of the key metrics included in Nordstrom'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, JWN looks like an impressive value stock at the moment.
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