Should Value Investors Buy Tapestry (TPR) 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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Tapestry (TPR) is a stock many investors are watching right now. TPR 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 10.60. This compares to its industry's average Forward P/E of 17.53. Over the past year, TPR's Forward P/E has been as high as 11.21 and as low as 6.25, with a median of 9.41.

TPR is also sporting a PEG ratio of 0.92. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TPR's industry has an average PEG of 1.11 right now. TPR's PEG has been as high as 0.95 and as low as 0.54, with a median of 0.78, all within the past year.

Another valuation metric that we should highlight is TPR's P/B ratio of 4.09. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.53. Within the past 52 weeks, TPR's P/B has been as high as 4.52 and as low as 2.52, with a median of 3.68.

Finally, investors will want to recognize that TPR has a P/CF ratio of 9.92. 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 15.50. Over the past year, TPR's P/CF has been as high as 10.16 and as low as 5.53, with a median of 8.51.

Value investors will likely look at more than just these metrics, but the above data helps show that Tapestry is likely undervalued currently. And when considering the strength of its earnings outlook, TPR sticks out at as one of the market's strongest value stocks.

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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.

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