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Is Chico's FAS (CHS) Stock Undervalued Right Now?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Chico's FAS (CHS - Free Report) . CHS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHS has a P/S ratio of 0.1. This compares to its industry's average P/S of 0.2.

Finally, investors should note that CHS has a P/CF ratio of 2.28. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. CHS's current P/CF looks attractive when compared to its industry's average P/CF of 8.59. Over the past 52 weeks, CHS's P/CF has been as high as 8.97 and as low as 2.28, with a median of 4.63.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Chico's FAS is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHS feels like a great value stock at the moment.


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