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Is Ethan Allen Interiors Inc. (ETD) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One stock to keep an eye on is Ethan Allen Interiors Inc. (ETD - Free Report) . ETD 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 11.17, which compares to its industry's average of 22.75. Over the past year, ETD's Forward P/E has been as high as 13.49 and as low as 10, with a median of 11.88.

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. ETD has a P/S ratio of 1.12. This compares to its industry's average P/S of 1.37.

Finally, we should also recognize that ETD has a P/CF ratio of 9.28. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ETD's P/CF compares to its industry's average P/CF of 15.49. Over the past year, ETD's P/CF has been as high as 10.56 and as low as 7.95, with a median of 9.46.

These are just a handful of the figures considered in Ethan Allen Interiors Inc.'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 ETD is an impressive value stock right now.


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