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Is Abercrombie & Fitch (ANF) 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One stock to keep an eye on is Abercrombie & Fitch (ANF - Free Report) . ANF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Investors will also notice that ANF has a PEG ratio of 1.29. 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. ANF's industry currently sports an average PEG of 1.40. Within the past year, ANF's PEG has been as high as 3.84 and as low as 1.16, with a median of 1.67.

Another valuation metric that we should highlight is ANF's P/B ratio of 1.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.45. Over the past 12 months, ANF's P/B has been as high as 1.73 and as low as 0.93, with a median of 1.28.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ANF has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.56.

These are just a handful of the figures considered in Abercrombie & Fitch'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 ANF is an impressive value stock right now.


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