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Should Value Investors Buy Tilly's (TLYS) Stock?

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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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Tilly's (TLYS - Free Report) is a stock many investors are watching right now. TLYS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that TLYS holds a PEG ratio of 1.05. 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. TLYS's PEG compares to its industry's average PEG of 1.13. Over the last 12 months, TLYS's PEG has been as high as 1.31 and as low as 0.84, with a median of 1.10.

Another valuation metric that we should highlight is TLYS's P/B ratio of 1.70. 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 3.02. Within the past 52 weeks, TLYS's P/B has been as high as 2.35 and as low as 1.32, with a median of 1.75.

Finally, our model also underscores that TLYS has a P/CF ratio of 6.57. 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. TLYS's P/CF compares to its industry's average P/CF of 7.75. Over the past 52 weeks, TLYS's P/CF has been as high as 8.18 and as low as 4.91, with a median of 6.87.

These are only a few of the key metrics included in Tilly's's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TLYS looks like an impressive value stock at the moment.


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