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Is Vipshop Holdings Limited (VIPS) Stock Undervalued 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Vipshop Holdings Limited (VIPS - Free Report) is a stock many investors are watching right now. VIPS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Another notable valuation metric for VIPS is its P/B ratio of 3.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. VIPS's current P/B looks attractive when compared to its industry's average P/B of 4.38. VIPS's P/B has been as high as 3.93 and as low as 1.49, with a median of 2.69, over the past year.

Finally, our model also underscores that VIPS has a P/CF ratio of 15.91. 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 stock's P/CF looks attractive against its industry's average P/CF of 27.54. VIPS's P/CF has been as high as 17.91 and as low as 8.43, with a median of 12.94, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Vipshop Holdings Limited is likely undervalued currently. And when considering the strength of its earnings outlook, VIPS sticks out at as one of the market's strongest value stocks.


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