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Should Value Investors Buy Capri Holdings (CPRI) Stock?
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.
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
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 is trading with a P/E ratio of 8.95, which compares to its industry's average of 13.21. CPRI's Forward P/E has been as high as 11.14 and as low as 5.42, with a median of 7.26, all within the past year.
Investors will also notice that CPRI has a PEG ratio of 0.76. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CPRI's PEG compares to its industry's average PEG of 0.88. CPRI's PEG has been as high as 0.76 and as low as 0.10, with a median of 0.59, all within the past year.
Another great Retail - Apparel and Shoes stock you could consider is Urban Outfitters (URBN - Free Report) , which is a # 2 (Buy) stock with a Value Score of A.
Shares of Urban Outfitters are currently trading at a forward earnings multiple of 12.01 and a PEG ratio of 0.67 compared to its industry's P/E and PEG ratios of 13.21 and 0.88, respectively.
URBN's price-to-earnings ratio has been as high as 13.98 and as low as 5.92, with a median of 9.50, while its PEG ratio has been as high as 0.78 and as low as 0.33, with a median of 0.53, all within the past year.
Urban Outfitters sports a P/B ratio of 1.43 as well; this compares to its industry's price-to-book ratio of 3.14. In the past 52 weeks, URBN's P/B has been as high as 1.68, as low as 1.01, with a median of 1.28.
These are only a few of the key metrics included in Capri Holdings and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CPRI and URBN look like an impressive value stock at the moment.