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Should Value Investors Buy Kohl's (KSS) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Kohl's (KSS - Free Report) is a stock many investors are watching right now. KSS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

We should also highlight that KSS has a P/B ratio of 1.38. The P/B ratio pits a stock's market value against 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 2.49. Within the past 52 weeks, KSS's P/B has been as high as 1.96 and as low as 0.63, with a median of 1.55.

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. KSS has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.55.

Finally, our model also underscores that KSS has a P/CF ratio of 4.67. 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. KSS's P/CF compares to its industry's average P/CF of 10.87. Over the past 52 weeks, KSS's P/CF has been as high as 13.82 and as low as 3.76, with a median of 6.98.

These are only a few of the key metrics included in Kohl's'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, KSS looks like an impressive value stock at the moment.


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