Back to top

Image: Bigstock

Should Value Investors Buy Victory Capital Holdings (VCTR) Stock?

Read MoreHide Full Article

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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

Victory Capital Holdings (VCTR - Free Report) is a stock many investors are watching right now. VCTR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 5.75, which compares to its industry's average of 12.14. Over the last 12 months, VCTR's Forward P/E has been as high as 8.63 and as low as 4.94, with a median of 6.55.

Another valuation metric that we should highlight is VCTR's P/B ratio of 2.44. The P/B is a method of comparing a stock's market value to 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, VCTR's P/B has been as high as 3.33 and as low as 2.03, with a median of 2.68.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VCTR has a P/S ratio of 2.47. This compares to its industry's average P/S of 2.83.

Finally, our model also underscores that VCTR has a P/CF ratio of 8.19. 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. This stock's P/CF looks attractive against its industry's average P/CF of 12.84. VCTR's P/CF has been as high as 11.16 and as low as 6.83, with a median of 9.22, 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 Victory Capital Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VCTR feels like a great value stock at the moment.


See More Zacks Research for These Tickers


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


Victory Capital Holdings, Inc. (VCTR) - free report >>

Published in