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Are Investors Undervaluing Synchrony (SYF) Right Now?
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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 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 Synchrony (SYF - Free Report) . SYF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.90 right now. For comparison, its industry sports an average P/E of 10.89. Over the last 12 months, SYF's Forward P/E has been as high as 9.10 and as low as 5.19, with a median of 7.51.
Investors will also notice that SYF has a PEG ratio of 1.03. 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. SYF's PEG compares to its industry's average PEG of 1.25. Over the past 52 weeks, SYF's PEG has been as high as 1.03 and as low as 0.49, with a median of 0.79.
Investors should also recognize that SYF has a P/B ratio of 1.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SYF's current P/B looks attractive when compared to its industry's average P/B of 2.06. Over the past 12 months, SYF's P/B has been as high as 1.79 and as low as 1.14, 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYF has a P/S ratio of 1.32. This compares to its industry's average P/S of 1.87.
Finally, investors should note that SYF has a P/CF ratio of 7.05. 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. SYF's current P/CF looks attractive when compared to its industry's average P/CF of 9.23. SYF's P/CF has been as high as 10.34 and as low as 5.47, with a median of 7.19, 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 Synchrony is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SYF feels like a great value stock at the moment.
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Are Investors Undervaluing Synchrony (SYF) Right Now?
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 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 Synchrony (SYF - Free Report) . SYF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.90 right now. For comparison, its industry sports an average P/E of 10.89. Over the last 12 months, SYF's Forward P/E has been as high as 9.10 and as low as 5.19, with a median of 7.51.
Investors will also notice that SYF has a PEG ratio of 1.03. 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. SYF's PEG compares to its industry's average PEG of 1.25. Over the past 52 weeks, SYF's PEG has been as high as 1.03 and as low as 0.49, with a median of 0.79.
Investors should also recognize that SYF has a P/B ratio of 1.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SYF's current P/B looks attractive when compared to its industry's average P/B of 2.06. Over the past 12 months, SYF's P/B has been as high as 1.79 and as low as 1.14, 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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYF has a P/S ratio of 1.32. This compares to its industry's average P/S of 1.87.
Finally, investors should note that SYF has a P/CF ratio of 7.05. 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. SYF's current P/CF looks attractive when compared to its industry's average P/CF of 9.23. SYF's P/CF has been as high as 10.34 and as low as 5.47, with a median of 7.19, 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 Synchrony is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SYF feels like a great value stock at the moment.