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Are Investors Undervaluing BuildABear Workshop (BBW) 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.

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.

BuildABear Workshop (BBW - Free Report) is a stock many investors are watching right now. BBW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.68. This compares to its industry's average Forward P/E of 16.14. Over the past year, BBW's Forward P/E has been as high as 8.69 and as low as 5.95, with a median of 6.84.

Finally, investors will want to recognize that BBW has a P/CF ratio of 7.10. 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. BBW's P/CF compares to its industry's average P/CF of 19.03. BBW's P/CF has been as high as 7.10 and as low as 4.66, with a median of 5.77, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that BuildABear Workshop is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BBW feels like a great value stock at the moment.


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