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Is GMS Inc. (GMS) Stock Undervalued Right Now?

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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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is GMS Inc. (GMS - Free Report) . GMS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.61, while its industry has an average P/E of 21.32. Over the past 52 weeks, GMS's Forward P/E has been as high as 11.12 and as low as 3.22, with a median of 8.39.

Investors will also notice that GMS has a PEG ratio of 0.63. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GMS's PEG compares to its industry's average PEG of 1.70. GMS's PEG has been as high as 1.26 and as low as 0.46, with a median of 1.17, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GMS has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.81.

Finally, we should also recognize that GMS has a P/CF ratio of 9.19. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 15.41. Over the past year, GMS's P/CF has been as high as 10.36 and as low as 2.27, with a median of 6.73.

These are just a handful of the figures considered in GMS Inc.'s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GMS is an impressive value stock right now.


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