Should Value Investors Buy Viad Corp (VVI) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Viad Corp (VVI). VVI is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.20, which compares to its industry's average of 19.80. Over the past year, VVI's Forward P/E has been as high as 60.33 and as low as 15.90, with a median of 23.45.

We also note that VVI holds a PEG ratio of 1.08. 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. VVI's industry has an average PEG of 1.68 right now. Within the past year, VVI's PEG has been as high as 4.02 and as low as 1.06, with a median of 1.56.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VVI has a P/S ratio of 0.6. This compares to its industry's average P/S of 0.83.

Finally, our model also underscores that VVI has a P/CF ratio of 10.81. 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. VVI's P/CF compares to its industry's average P/CF of 16.28. Over the past year, VVI's P/CF has been as high as 12.33 and as low as 4.34, with a median of 8.22.

These are only a few of the key metrics included in Viad Corp'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, VVI looks like an impressive 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.

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