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Is Stitch Fix (SFIX) 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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 company value investors might notice is Stitch Fix (SFIX - Free Report) . SFIX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

Investors should also recognize that SFIX has a P/B ratio of 2.54. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.77. SFIX's P/B has been as high as 2.58 and as low as 1.19, with a median of 1.73, over 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. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SFIX has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.5.

Investors could also keep in mind Urban Outfitters (URBN - Free Report) , an Retail - Apparel and Shoes stock with a Zacks Rank of # 2 (Buy) and Value grade of A.

Urban Outfitters is currently trading with a Forward P/E ratio of 11.89 while its PEG ratio sits at 1.04. Both of the company's metrics compare favorably to its industry's average P/E of 16.17 and average PEG ratio of 1.51.

URBN's price-to-earnings ratio has been as high as 13.39 and as low as 9.40, with a median of 11.26, while its PEG ratio has been as high as 1.07 and as low as 0.40, with a median of 0.61, all within the past year.

Additionally, Urban Outfitters has a P/B ratio of 1.91 while its industry's price-to-book ratio sits at 4.77. For URBN, this valuation metric has been as high as 2.07, as low as 1.44, with a median of 1.73 over the past year.

These are only a few of the key metrics included in Stitch Fix and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, SFIX and URBN look like an impressive value stock at the moment.


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