Back to top

Image: Bigstock

Is Big Lots (BIG) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Big Lots (BIG - Free Report) is a stock many investors are watching right now. BIG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.51, while its industry has an average P/E of 19.11. BIG's Forward P/E has been as high as 13.90 and as low as 7.82, with a median of 11.25, all within the past year.

BIG is also sporting a PEG ratio of 0.70. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BIG's industry has an average PEG of 1.77 right now. Over the past 52 weeks, BIG's PEG has been as high as 1.03 and as low as 0.58, with a median of 0.83.

We should also highlight that BIG has a P/B ratio of 2.76. 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 6.57. Over the past 12 months, BIG's P/B has been as high as 4.82 and as low as 2.36, with a median of 3.61.

Finally, investors should note that BIG has a P/CF ratio of 6.92. 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. BIG's current P/CF looks attractive when compared to its industry's average P/CF of 14.04. BIG's P/CF has been as high as 9.72 and as low as 5.93, with a median of 7.82, all within the past year.

These are only a few of the key metrics included in Big Lots's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BIG looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Big Lots, Inc. (BIG) - free report >>