Should Value Investors Buy Hibbett Sports (HIBB) Stock?
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Hibbett Sports (HIBB). HIBB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 11.68, while its industry has an average P/E of 15.38. Over the past 52 weeks, HIBB's Forward P/E has been as high as 15.06 and as low as 7.76, with a median of 11.07.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HIBB has a P/S ratio of 0.4. This compares to its industry's average P/S of 0.43.
Finally, our model also underscores that HIBB has a P/CF ratio of 7.66. 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. HIBB's P/CF compares to its industry's average P/CF of 21.51. Over the past 52 weeks, HIBB's P/CF has been as high as 9.22 and as low as 4.40, with a median of 6.31.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Hibbett Sports is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HIBB feels like a great 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.