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Is Vera Bradley (VRA) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Vera Bradley (VRA - Free Report) . VRA is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.79, while its industry has an average P/E of 14.48. Over the last 12 months, VRA's Forward P/E has been as high as 25.42 and as low as 6.63, with a median of 10.64.

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. VRA has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.41.

Finally, investors will want to recognize that VRA has a P/CF ratio of 4.33. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.31. VRA's P/CF has been as high as 5.59 and as low as 2.48, with a median of 3.85, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Vera Bradley is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VRA feels like a great value stock at the moment.


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