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Are Investors Undervaluing Bloomin' Brands (BLMN) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Bloomin' Brands (BLMN - Free Report) . BLMN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 13.04, while its industry has an average P/E of 24.09. BLMN's Forward P/E has been as high as 14.22 and as low as 9.25, with a median of 12.12, all within the past year.

We also note that BLMN holds a PEG ratio of 1.33. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BLMN's PEG compares to its industry's average PEG of 2.16. Within the past year, BLMN's PEG has been as high as 1.48 and as low as 0.96, with a median of 1.25.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BLMN has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.87.

Finally, investors will want to recognize that BLMN has a P/CF ratio of 4.93. 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. BLMN's P/CF compares to its industry's average P/CF of 17.26. BLMN's P/CF has been as high as 6.03 and as low as 3.72, with a median of 4.99, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Bloomin' Brands is likely undervalued currently. And when considering the strength of its earnings outlook, BLMN sticks out at as one of the market's strongest value stocks.


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