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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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 16.21, while its industry has an average P/E of 18.07. KMX's Forward P/E has been as high as 16.71 and as low as 11.39, with a median of 14.39, all within the past year.
Investors will also notice that KMX has a PEG ratio of 1.29. 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. KMX's PEG compares to its industry's average PEG of 1.39. Over the past 52 weeks, KMX's PEG has been as high as 1.35 and as low as 0.77, with a median of 1.05.
Investors should also recognize that KMX has a P/B ratio of 4.22. The P/B ratio is used to compare a stock's market value with 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 11.43. KMX's P/B has been as high as 4.22 and as low as 2.88, with a median of 3.65, over the past year.
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. KMX has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.19.
Finally, investors will want to recognize that KMX has a P/CF ratio of 13.88. 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. KMX's current P/CF looks attractive when compared to its industry's average P/CF of 23.77. Within the past 12 months, KMX's P/CF has been as high as 15.98 and as low as 9.71, with a median of 12.84.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.
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Is CarMax (KMX) Stock Undervalued Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 16.21, while its industry has an average P/E of 18.07. KMX's Forward P/E has been as high as 16.71 and as low as 11.39, with a median of 14.39, all within the past year.
Investors will also notice that KMX has a PEG ratio of 1.29. 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. KMX's PEG compares to its industry's average PEG of 1.39. Over the past 52 weeks, KMX's PEG has been as high as 1.35 and as low as 0.77, with a median of 1.05.
Investors should also recognize that KMX has a P/B ratio of 4.22. The P/B ratio is used to compare a stock's market value with 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 11.43. KMX's P/B has been as high as 4.22 and as low as 2.88, with a median of 3.65, over the past year.
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. KMX has a P/S ratio of 0.79. This compares to its industry's average P/S of 1.19.
Finally, investors will want to recognize that KMX has a P/CF ratio of 13.88. 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. KMX's current P/CF looks attractive when compared to its industry's average P/CF of 23.77. Within the past 12 months, KMX's P/CF has been as high as 15.98 and as low as 9.71, with a median of 12.84.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.