Should Value Investors Buy PVH (PVH) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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.
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.
PVH (PVH) is a stock many investors are watching right now. PVH 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 9.96. This compares to its industry's average Forward P/E of 17.54. Over the last 12 months, PVH's Forward P/E has been as high as 12.41 and as low as 6.42, with a median of 9.40.
PVH is also sporting a PEG ratio of 0.96. 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. PVH's industry has an average PEG of 1.31 right now. Over the last 12 months, PVH's PEG has been as high as 1.03 and as low as 0.53, with a median of 0.82.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PVH has a P/S ratio of 0.74. This compares to its industry's average P/S of 0.78.
Finally, investors should note that PVH has a P/CF ratio of 7.51. 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 stock's P/CF looks attractive against its industry's average P/CF of 22.36. Over the past year, PVH's P/CF has been as high as 10.02 and as low as 5.18, with a median of 7.28.
These are just a handful of the figures considered in PVH's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PVH is an impressive value stock right now.
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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.