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Is Macy's (M) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

Macy's (M - Free Report) is a stock many investors are watching right now. M is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.43, while its industry has an average P/E of 12.44. M's Forward P/E has been as high as 11.55 and as low as 6.46, with a median of 9.43, all within the past year.

We also note that M holds a PEG ratio of 1.11. 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. M's PEG compares to its industry's average PEG of 1.56. M's PEG has been as high as 1.36 and as low as 0.76, with a median of 1.11, all within the past year.

We should also highlight that M has a P/B ratio of 1.81. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.25. Over the past year, M's P/B has been as high as 2.18 and as low as 1.26, with a median of 1.79.

Finally, we should also recognize that M has a P/CF ratio of 4.17. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.53. Within the past 12 months, M's P/CF has been as high as 5.02 and as low as 2.89, with a median of 4.17.

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




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