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Should Value Investors Buy Sprouts Farmers (SFM) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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.
One company to watch right now is Sprouts Farmers (SFM - Free Report) . SFM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.55. This compares to its industry's average Forward P/E of 15.34. Over the past year, SFM's Forward P/E has been as high as 17.93 and as low as 10.28, with a median of 15.02.
We also note that SFM holds a PEG ratio of 1.25. 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. SFM's PEG compares to its industry's average PEG of 1.69. SFM's PEG has been as high as 4.78 and as low as 1.21, with a median of 2.21, all within the past year.
Finally, investors should note that SFM has a P/CF ratio of 5.58. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.44. Over the past year, SFM's P/CF has been as high as 7.93 and as low as 4.44, with a median of 6.49.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sprouts Farmers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SFM feels like a great value stock at the moment.
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Should Value Investors Buy Sprouts Farmers (SFM) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
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.
One company to watch right now is Sprouts Farmers (SFM - Free Report) . SFM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.55. This compares to its industry's average Forward P/E of 15.34. Over the past year, SFM's Forward P/E has been as high as 17.93 and as low as 10.28, with a median of 15.02.
We also note that SFM holds a PEG ratio of 1.25. 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. SFM's PEG compares to its industry's average PEG of 1.69. SFM's PEG has been as high as 4.78 and as low as 1.21, with a median of 2.21, all within the past year.
Finally, investors should note that SFM has a P/CF ratio of 5.58. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 8.44. Over the past year, SFM's P/CF has been as high as 7.93 and as low as 4.44, with a median of 6.49.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sprouts Farmers is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SFM feels like a great value stock at the moment.