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Is Sysco (SYY) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Sysco (SYY - Free Report) is a stock many investors are watching right now. SYY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

SYY is also sporting a PEG ratio of 1.85. 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. SYY's PEG compares to its industry's average PEG of 2.30. Within the past year, SYY's PEG has been as high as 2.22 and as low as 1.62, with a median of 1.82.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SYY has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.03.

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




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