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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 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.
One company to watch right now is CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.76, which compares to its industry's average of 17.36. Over the past year, KMX's Forward P/E has been as high as 16.77 and as low as 11.39, with a median of 14.39.
KMX is also sporting a PEG ratio of 1.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KMX's PEG compares to its industry's average PEG of 1.37. Over the past 52 weeks, KMX's PEG has been as high as 1.35 and as low as 0.77, with a median of 1.05.
Another notable valuation metric for KMX is its P/B ratio of 4.13. 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 10.81. KMX's P/B has been as high as 4.40 and as low as 2.88, with a median of 3.65, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KMX has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.08.
Finally, investors will want to recognize that KMX has a P/CF ratio of 13.60. 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. KMX's P/CF compares to its industry's average P/CF of 23.06. Over the past 52 weeks, KMX's P/CF has been as high as 15.97 and as low as 9.71, with a median of 12.84.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.
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Is CarMax (KMX) a Great Value Stock Right Now?
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 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.
One company to watch right now is CarMax (KMX - Free Report) . KMX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.76, which compares to its industry's average of 17.36. Over the past year, KMX's Forward P/E has been as high as 16.77 and as low as 11.39, with a median of 14.39.
KMX is also sporting a PEG ratio of 1.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KMX's PEG compares to its industry's average PEG of 1.37. Over the past 52 weeks, KMX's PEG has been as high as 1.35 and as low as 0.77, with a median of 1.05.
Another notable valuation metric for KMX is its P/B ratio of 4.13. 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 10.81. KMX's P/B has been as high as 4.40 and as low as 2.88, with a median of 3.65, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. KMX has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.08.
Finally, investors will want to recognize that KMX has a P/CF ratio of 13.60. 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. KMX's P/CF compares to its industry's average P/CF of 23.06. Over the past 52 weeks, KMX's P/CF has been as high as 15.97 and as low as 9.71, with a median of 12.84.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarMax is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KMX feels like a great value stock at the moment.