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Are Investors Undervaluing Capri Holdings (CPRI) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
Capri Holdings (CPRI - Free Report) is a stock many investors are watching right now. CPRI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.60. This compares to its industry's average Forward P/E of 12.38. Over the past 52 weeks, CPRI's Forward P/E has been as high as 11.14 and as low as 5.42, with a median of 7.26.
Investors will also notice that CPRI has a PEG ratio of 0.73. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CPRI's industry currently sports an average PEG of 0.83. Over the last 12 months, CPRI's PEG has been as high as 0.76 and as low as 0.10, with a median of 0.56.
Urban Outfitters (URBN - Free Report) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. URBN is a # 2 (Buy) stock with a Value grade of A.
Urban Outfitters is currently trading with a Forward P/E ratio of 11.62 while its PEG ratio sits at 0.65. Both of the company's metrics compare favorably to its industry's average P/E of 12.38 and average PEG ratio of 0.83.
Over the past year, URBN's P/E has been as high as 13.98, as low as 5.92, with a median of 9.29; its PEG ratio has been as high as 0.78, as low as 0.33, with a median of 0.56 during the same time period.
Furthermore, Urban Outfitters holds a P/B ratio of 1.35 and its industry's price-to-book ratio is 2.94. URBN's P/B has been as high as 1.68, as low as 1.01, with a median of 1.28 over the past 12 months.
These are just a handful of the figures considered in Capri Holdings and Urban Outfitters's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CPRI and URBN is an impressive value stock right now.