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Are Investors Undervaluing Habit Restaurants (HABT) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

One company to watch right now is Habit Restaurants . HABT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

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. HABT has a P/S ratio of 0.64. This compares to its industry's average P/S of 0.88.

Finally, investors will want to recognize that HABT has a P/CF ratio of 7.59. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.16. Over the past 52 weeks, HABT's P/CF has been as high as 15.77 and as low as 5.38, with a median of 7.82.

These are only a few of the key metrics included in Habit Restaurants's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, HABT looks like an impressive value stock at the moment.

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