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Are Investors Undervaluing Vipshop (VIPS) Right Now?
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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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Vipshop (VIPS - Free Report) . VIPS is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.96 right now. For comparison, its industry sports an average P/E of 16.76. VIPS's Forward P/E has been as high as 7.28 and as low as 4.92, with a median of 5.91, all within the past year.
We also note that VIPS holds a PEG ratio of 1.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VIPS's industry currently sports an average PEG of 2.34. Over the last 12 months, VIPS's PEG has been as high as 2.29 and as low as 1.14, with a median of 1.45.
Investors should also recognize that VIPS has a P/B ratio of 1.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.64. VIPS's P/B has been as high as 1.69 and as low as 1.09, with a median of 1.33, 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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VIPS has a P/S ratio of 0.7. This compares to its industry's average P/S of 0.75.
Finally, investors will want to recognize that VIPS has a P/CF ratio of 7.96. 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 18.67. Within the past 12 months, VIPS's P/CF has been as high as 8.18 and as low as 5.08, with a median of 6.08.
Value investors will likely look at more than just these metrics, but the above data helps show that Vipshop is likely undervalued currently. And when considering the strength of its earnings outlook, VIPS sticks out as one of the market's strongest value stocks.
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Are Investors Undervaluing Vipshop (VIPS) Right Now?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Vipshop (VIPS - Free Report) . VIPS is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.96 right now. For comparison, its industry sports an average P/E of 16.76. VIPS's Forward P/E has been as high as 7.28 and as low as 4.92, with a median of 5.91, all within the past year.
We also note that VIPS holds a PEG ratio of 1.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VIPS's industry currently sports an average PEG of 2.34. Over the last 12 months, VIPS's PEG has been as high as 2.29 and as low as 1.14, with a median of 1.45.
Investors should also recognize that VIPS has a P/B ratio of 1.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.64. VIPS's P/B has been as high as 1.69 and as low as 1.09, with a median of 1.33, 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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VIPS has a P/S ratio of 0.7. This compares to its industry's average P/S of 0.75.
Finally, investors will want to recognize that VIPS has a P/CF ratio of 7.96. 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 18.67. Within the past 12 months, VIPS's P/CF has been as high as 8.18 and as low as 5.08, with a median of 6.08.
Value investors will likely look at more than just these metrics, but the above data helps show that Vipshop is likely undervalued currently. And when considering the strength of its earnings outlook, VIPS sticks out as one of the market's strongest value stocks.