Back to top

Image: Bigstock

Is Malibu Boats (MBUU) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Malibu Boats (MBUU - Free Report) . MBUU is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 6.23. This compares to its industry's average Forward P/E of 15.14. MBUU's Forward P/E has been as high as 12.67 and as low as 6.22, with a median of 9.31, all within the past year.

Another valuation metric that we should highlight is MBUU's P/B ratio of 2.41. 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 stock's P/B looks attractive against its industry's average P/B of 6.10. Within the past 52 weeks, MBUU's P/B has been as high as 4.64 and as low as 2.21, with a median of 3.45.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MBUU has a P/S ratio of 0.88. This compares to its industry's average P/S of 1.03.

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


See More Zacks Research for These Tickers


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


Malibu Boats, Inc. (MBUU) - free report >>

Published in