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Are Investors Undervaluing Vipshop Holdings Limited (VIPS) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

One company to watch right now is Vipshop Holdings Limited (VIPS). VIPS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

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Investors should also recognize that VIPS has a P/B ratio of 3.49. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. VIPS's current P/B looks attractive when compared to its industry's average P/B of 4.38. Over the past 12 months, VIPS's P/B has been as high as 3.93 and as low as 1.49, with a median of 2.63.

Finally, we should also recognize that VIPS has a P/CF ratio of 16. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. VIPS's P/CF compares to its industry's average P/CF of 27.54. Within the past 12 months, VIPS's P/CF has been as high as 18.02 and as low as 8.43, with a median of 12.70.

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


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