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Is Office Depot (ODP) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Office Depot (ODP - Free Report) is a stock many investors are watching right now. ODP is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.86 right now. For comparison, its industry sports an average P/E of 12.17. Over the last 12 months, ODP's Forward P/E has been as high as 9.47 and as low as 4.42, with a median of 7.51.

Finally, investors will want to recognize that ODP has a P/CF ratio of 5.71. 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. ODP's P/CF compares to its industry's average P/CF of 17.90. Over the past year, ODP's P/CF has been as high as 7.21 and as low as 3.09, with a median of 5.35.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Office Depot is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ODP feels like a great value stock at the moment.




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