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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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is KB Home (KBH - Free Report) . KBH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.90. This compares to its industry's average Forward P/E of 10.06. KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.93, all within the past year.
Investors should also note that KBH holds a PEG ratio of 0.73. 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. KBH's PEG compares to its industry's average PEG of 0.76. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.11.
Another valuation metric that we should highlight is KBH's P/B ratio of 1.28. 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 1.35. KBH's P/B has been as high as 1.32 and as low as 0.77, with a median of 1.04, over the past year.
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. KBH has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.84.
Finally, our model also underscores that KBH has a P/CF ratio of 7.83. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.37. Over the past 52 weeks, KBH's P/CF has been as high as 8.11 and as low as 3.53, with a median of 5.45.
These are just a handful of the figures considered in KB Home'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 KBH is an impressive value stock right now.
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Should Value Investors Buy KB Home (KBH) Stock?
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is KB Home (KBH - Free Report) . KBH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 7.90. This compares to its industry's average Forward P/E of 10.06. KBH's Forward P/E has been as high as 9.59 and as low as 5.72, with a median of 7.93, all within the past year.
Investors should also note that KBH holds a PEG ratio of 0.73. 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. KBH's PEG compares to its industry's average PEG of 0.76. Within the past year, KBH's PEG has been as high as 1.35 and as low as 0.70, with a median of 1.11.
Another valuation metric that we should highlight is KBH's P/B ratio of 1.28. 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 1.35. KBH's P/B has been as high as 1.32 and as low as 0.77, with a median of 1.04, over the past year.
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. KBH has a P/S ratio of 0.77. This compares to its industry's average P/S of 0.84.
Finally, our model also underscores that KBH has a P/CF ratio of 7.83. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.37. Over the past 52 weeks, KBH's P/CF has been as high as 8.11 and as low as 3.53, with a median of 5.45.
These are just a handful of the figures considered in KB Home'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 KBH is an impressive value stock right now.