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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Yelp (YELP - Free Report) . YELP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.01, while its industry has an average P/E of 18.81. Over the past 52 weeks, YELP's Forward P/E has been as high as 21.69 and as low as 12.66, with a median of 16.11.
We also note that YELP holds a PEG ratio of 0.69. 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. YELP's PEG compares to its industry's average PEG of 1.97. Over the last 12 months, YELP's PEG has been as high as 0.91 and as low as 0.50, with a median of 0.69.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. YELP has a P/S ratio of 1.19. This compares to its industry's average P/S of 1.2.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Yelp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, YELP feels like a great value stock at the moment.
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Should Value Investors Buy Yelp (YELP) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 Yelp (YELP - Free Report) . YELP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.01, while its industry has an average P/E of 18.81. Over the past 52 weeks, YELP's Forward P/E has been as high as 21.69 and as low as 12.66, with a median of 16.11.
We also note that YELP holds a PEG ratio of 0.69. 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. YELP's PEG compares to its industry's average PEG of 1.97. Over the last 12 months, YELP's PEG has been as high as 0.91 and as low as 0.50, with a median of 0.69.
Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. YELP has a P/S ratio of 1.19. This compares to its industry's average P/S of 1.2.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Yelp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, YELP feels like a great value stock at the moment.