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Is SMART Global Holdings, Inc. (SGH) Stock Undervalued Right Now?

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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.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

SMART Global Holdings, Inc. (SGH - Free Report) is a stock many investors are watching right now. SGH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 4.37. This compares to its industry's average Forward P/E of 7.70. Over the past year, SGH's Forward P/E has been as high as 11.67 and as low as 4.22, with a median of 6.89.

We also note that SGH holds a PEG ratio of 0.32. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SGH's PEG compares to its industry's average PEG of 0.86. Over the past 52 weeks, SGH's PEG has been as high as 0.78 and as low as 0.30, with a median of 0.47.

Finally, our model also underscores that SGH has a P/CF ratio of 6.43. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SGH's current P/CF looks attractive when compared to its industry's average P/CF of 12.86. SGH's P/CF has been as high as 25.88 and as low as 6.21, with a median of 12.34, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that SMART Global Holdings, Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SGH feels like a great value stock at the moment.


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