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Is HomeStreet (HMST) a Great Value Stock Right Now?

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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.

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 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 value investors might notice is HomeStreet (HMST - Free Report) . HMST is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.39, while its industry has an average P/E of 10.75. Over the past 52 weeks, HMST's Forward P/E has been as high as 12.37 and as low as 8.43, with a median of 10.08.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HMST has a P/S ratio of 2.33. This compares to its industry's average P/S of 2.97.

Finally, investors should note that HMST has a P/CF ratio of 7.27. 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. HMST's current P/CF looks attractive when compared to its industry's average P/CF of 7.91. Within the past 12 months, HMST's P/CF has been as high as 9.46 and as low as 6.33, with a median of 7.81.

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

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