Back to top

Image: Bigstock

Is Dick's Sporting Goods (DKS) a Great Value Stock Right Now?

Read MoreHide Full Article

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company to watch right now is Dick's Sporting Goods (DKS - Free Report) . DKS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.60, while its industry has an average P/E of 17.09. DKS's Forward P/E has been as high as 30.38 and as low as 4.34, with a median of 13.14, all within the past year.

We also note that DKS holds a PEG ratio of 2.06. 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. DKS's industry currently sports an average PEG of 2.39. DKS's PEG has been as high as 7.45 and as low as 0.72, with a median of 2.28, all within the past year.

Investors should also recognize that DKS has a P/B ratio of 2.49. 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 company's current P/B looks solid when compared to its industry's average P/B of 5.76. Over the past year, DKS's P/B has been as high as 2.91 and as low as 0.81, with a median of 2.15.

Finally, investors should note that DKS has a P/CF ratio of 8.08. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.79. Within the past 12 months, DKS's P/CF has been as high as 10.10 and as low as 2.54, with a median of 7.36.

These are only a few of the key metrics included in Dick's Sporting Goods'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, DKS looks like an impressive value stock at the moment.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


DICKS Sporting Goods, Inc. (DKS) - free report >>

Published in