Back to top

Is Callaway Golf (ELY) a Great Value Stock Right Now?

Read MoreHide Full Article

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Callaway Golf (ELY - Free Report) . ELY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Investors will also notice that ELY has a PEG ratio of 0.59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ELY's PEG compares to its industry's average PEG of 0.97. ELY's PEG has been as high as 0.93 and as low as 0.53, with a median of 0.64, all within the past year.

We should also highlight that ELY has a P/B ratio of 2.14. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. ELY's current P/B looks attractive when compared to its industry's average P/B of 3.41. Over the past 12 months, ELY's P/B has been as high as 3.06 and as low as 1.80, with a median of 2.17.

Finally, our model also underscores that ELY has a P/CF ratio of 14.67. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.13. Within the past 12 months, ELY's P/CF has been as high as 18.20 and as low as 10.43, with a median of 13.01.

These are just a handful of the figures considered in Callaway Golf'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 ELY is an impressive value stock right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Callaway Golf Company (ELY) - free report >>

Published in