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Should Value Investors Buy Zumiez (ZUMZ) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One stock to keep an eye on is Zumiez (ZUMZ - Free Report) . ZUMZ is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ZUMZ has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.5.

Finally, investors will want to recognize that ZUMZ has a P/CF ratio of 15.16. 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. ZUMZ's current P/CF looks attractive when compared to its industry's average P/CF of 16.03. Within the past 12 months, ZUMZ's P/CF has been as high as 15.89 and as low as -16.39, with a median of 10.28.

Value investors will likely look at more than just these metrics, but the above data helps show that Zumiez is likely undervalued currently. And when considering the strength of its earnings outlook, ZUMZ sticks out as one of the market's strongest value stocks.


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