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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 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 company value investors might notice is CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.89, while its industry has an average P/E of 23.12. Over the past year, KMX's Forward P/E has been as high as 25.16 and as low as 13.09, with a median of 19.26.
We also note that KMX holds a PEG ratio of 0.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KMX's industry currently sports an average PEG of 1.55. Within the past year, KMX's PEG has been as high as 1.59 and as low as 0.83, with a median of 1.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.
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Should Value Investors Buy CarMax (KMX) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 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 company value investors might notice is CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.89, while its industry has an average P/E of 23.12. Over the past year, KMX's Forward P/E has been as high as 25.16 and as low as 13.09, with a median of 19.26.
We also note that KMX holds a PEG ratio of 0.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KMX's industry currently sports an average PEG of 1.55. Within the past year, KMX's PEG has been as high as 1.59 and as low as 0.83, with a median of 1.22.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.