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Are Investors Undervaluing Dick's Sporting Goods (DKS) Right Now?

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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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Dick's Sporting Goods (DKS - Free Report) is a stock many investors are watching right now. DKS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.95 right now. For comparison, its industry sports an average P/E of 12.53. Over the last 12 months, DKS's Forward P/E has been as high as 12.49 and as low as 8.87, with a median of 10.71.

Another valuation metric that we should highlight is DKS's P/B ratio of 1.86. 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 solid versus its industry's average P/B of 5.43. DKS's P/B has been as high as 2.03 and as low as 1.53, with a median of 1.79, over the past year.

Finally, we should also recognize that DKS has a P/CF ratio of 6. 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. DKS's P/CF compares to its industry's average P/CF of 16.97. Over the past 52 weeks, DKS's P/CF has been as high as 6.98 and as low as 5, with a median of 5.95.

These are just a handful of the figures considered in Dick's Sporting Goods'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 DKS is an impressive value stock right now.


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