You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should Value Investors Buy Sprouts Farmers Market (SFM) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is Sprouts Farmers Market (SFM - Free Report) . SFM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.35 right now. For comparison, its industry sports an average P/E of 16.33. Over the past year, SFM's Forward P/E has been as high as 15.37 and as low as 10.48, with a median of 13.01.
Finally, investors should note that SFM has a P/CF ratio of 7.67. 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 10.43. SFM's P/CF has been as high as 8.20 and as low as 4.90, with a median of 6.12, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Sprouts Farmers Market is likely undervalued currently. And when considering the strength of its earnings outlook, SFM sticks out at as one of the market's strongest value stocks.