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Are Investors Undervaluing Duluth Holdings (DLTH) 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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Duluth Holdings (DLTH - Free Report) is a stock many investors are watching right now. DLTH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DLTH has a P/S ratio of 0.23. This compares to its industry's average P/S of 0.62.

Finally, we should also recognize that DLTH has a P/CF ratio of 7.05. 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. DLTH's current P/CF looks attractive when compared to its industry's average P/CF of 24.31. Over the past year, DLTH's P/CF has been as high as 9.85 and as low as 5.64, with a median of 7.14.

These are just a handful of the figures considered in Duluth Holdings'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 DLTH is an impressive value stock right now.


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