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Should Value Investors Buy Vipshop Holdings Limited (VIPS) Stock?

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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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Vipshop Holdings Limited (VIPS - Free Report) is a stock many investors are watching right now. VIPS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors should also recognize that VIPS has a P/B ratio of 1.95. The P/B ratio is used to compare a stock's market value with 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 4.46. VIPS's P/B has been as high as 5.68 and as low as 1.24, with a median of 2.74, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VIPS has a P/S ratio of 0.38. This compares to its industry's average P/S of 1.02.

Finally, we should also recognize that VIPS has a P/CF ratio of 9.39. 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. VIPS's current P/CF looks attractive when compared to its industry's average P/CF of 27.85. Over the past 52 weeks, VIPS's P/CF has been as high as 25.29 and as low as 5.97, with a median of 13.20.

These are just a handful of the figures considered in Vipshop Holdings Limited's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that VIPS is an impressive value stock right now.


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