Should Value Investors Buy Hibbett Sports (HIBB) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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 to watch right now is Hibbett Sports (HIBB). HIBB is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.85. This compares to its industry's average Forward P/E of 13.17. Over the past 52 weeks, HIBB's Forward P/E has been as high as 15.06 and as low as 6.86, with a median of 10.27.
HIBB is also sporting a PEG ratio of 1.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HIBB's industry currently sports an average PEG of 1.36. Over the past 52 weeks, HIBB's PEG has been as high as 5.45 and as low as 0.96, with a median of 1.34.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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 0.27. This compares to its industry's average P/S of 0.33.
Finally, investors will want to recognize that HIBB has a P/CF ratio of 4.87. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.23. HIBB's P/CF has been as high as 8.84 and as low as 4.24, with a median of 5.71, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Hibbett Sports is likely undervalued currently. And when considering the strength of its earnings outlook, HIBB sticks out at as one of the market's strongest value stocks.
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