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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
Synchrony (SYF - Free Report) is a stock many investors are watching right now. SYF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.89, which compares to its industry's average of 9.01. Over the past year, SYF's Forward P/E has been as high as 15.25 and as low as 5.89, with a median of 9.17.
SYF is also sporting a PEG ratio of 0.56. 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. SYF's PEG compares to its industry's average PEG of 0.93. Over the last 12 months, SYF's PEG has been as high as 1.99 and as low as 0.56, with a median of 1.04.
Another valuation metric that we should highlight is SYF's P/B ratio of 1.28. 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. SYF's current P/B looks attractive when compared to its industry's average P/B of 1.78. Within the past 52 weeks, SYF's P/B has been as high as 2.18 and as low as 1.28, with a median of 1.77.
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. SYF has a P/S ratio of 1. This compares to its industry's average P/S of 1.86.
Finally, our model also underscores that SYF has a P/CF ratio of 6.88. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. SYF's P/CF compares to its industry's average P/CF of 11.16. Within the past 12 months, SYF's P/CF has been as high as 14.40 and as low as 6.86, with a median of 11.01.
Value investors will likely look at more than just these metrics, but the above data helps show that Synchrony is likely undervalued currently. And when considering the strength of its earnings outlook, SYF sticks out at as one of the market's strongest value stocks.
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Is Synchrony (SYF) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.
Synchrony (SYF - Free Report) is a stock many investors are watching right now. SYF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.89, which compares to its industry's average of 9.01. Over the past year, SYF's Forward P/E has been as high as 15.25 and as low as 5.89, with a median of 9.17.
SYF is also sporting a PEG ratio of 0.56. 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. SYF's PEG compares to its industry's average PEG of 0.93. Over the last 12 months, SYF's PEG has been as high as 1.99 and as low as 0.56, with a median of 1.04.
Another valuation metric that we should highlight is SYF's P/B ratio of 1.28. 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. SYF's current P/B looks attractive when compared to its industry's average P/B of 1.78. Within the past 52 weeks, SYF's P/B has been as high as 2.18 and as low as 1.28, with a median of 1.77.
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. SYF has a P/S ratio of 1. This compares to its industry's average P/S of 1.86.
Finally, our model also underscores that SYF has a P/CF ratio of 6.88. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. SYF's P/CF compares to its industry's average P/CF of 11.16. Within the past 12 months, SYF's P/CF has been as high as 14.40 and as low as 6.86, with a median of 11.01.
Value investors will likely look at more than just these metrics, but the above data helps show that Synchrony is likely undervalued currently. And when considering the strength of its earnings outlook, SYF sticks out at as one of the market's strongest value stocks.