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Should Value Investors Buy Malibu Boats (MBUU) Stock?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 stock to keep an eye on is Malibu Boats (MBUU). MBUU is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 11.31, which compares to its industry's average of 33.73. Over the last 12 months, MBUU's Forward P/E has been as high as 12.33 and as low as 6.24, with a median of 9.49.

Investors should also note that MBUU holds a PEG ratio of 1.13. 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. MBUU's PEG compares to its industry's average PEG of 2.21. Within the past year, MBUU's PEG has been as high as 1.15 and as low as 0.62, with a median of 0.81.

Another valuation metric that we should highlight is MBUU's P/B ratio of 4.17. 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. MBUU's current P/B looks attractive when compared to its industry's average P/B of 5.21. Over the past 12 months, MBUU's P/B has been as high as 5.84 and as low as 2.50, with a median of 3.83.

Finally, investors will want to recognize that MBUU has a P/CF ratio of 10.72. 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. MBUU's current P/CF looks attractive when compared to its industry's average P/CF of 28.70. MBUU's P/CF has been as high as 14.47 and as low as 6.43, with a median of 9.65, all within the past year.

These are only a few of the key metrics included in Malibu Boats'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, MBUU looks like an impressive value stock at the moment.


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