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Is Kohl's (KSS) 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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Kohl's (KSS - Free Report) . KSS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Investors should also recognize that KSS has a P/B ratio of 1.51. 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 2.52. Over the past 12 months, KSS's P/B has been as high as 1.96 and as low as 0.60, with a median of 1.44.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KSS has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.64.

Finally, we should also recognize that KSS has a P/CF ratio of 6.19. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. KSS's current P/CF looks attractive when compared to its industry's average P/CF of 9.96. Within the past 12 months, KSS's P/CF has been as high as 13.82 and as low as 2.99, with a median of 6.98.

Value investors will likely look at more than just these metrics, but the above data helps show that Kohl's is likely undervalued currently. And when considering the strength of its earnings outlook, KSS sticks out at as one of the market's strongest value stocks.


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