Yahoo Finance Is Macy's (M) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 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.
Macy's (M) is a stock many investors are watching right now. M is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.67. This compares to its industry's average Forward P/E of 9.79. Over the past year, M's Forward P/E has been as high as 8.39 and as low as 3.84, with a median of 6.35.
We also note that M holds a PEG ratio of 0.60. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. M's PEG compares to its industry's average PEG of 1.22. Over the past 52 weeks, M's PEG has been as high as 0.64 and as low as 0.32, with a median of 0.43.
Another notable valuation metric for M is its P/B ratio of 1.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.99. Within the past 52 weeks, M's P/B has been as high as 1.43 and as low as 0.69, with a median of 1.16.
Finally, our model also underscores that M has a P/CF ratio of 5.72. 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. M's current P/CF looks attractive when compared to its industry's average P/CF of 7.75. Within the past 12 months, M's P/CF has been as high as 6.25 and as low as 1.77, with a median of 3.07.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Macy's is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, M feels like a great value stock at the moment.
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Macy's, Inc. (M) : Free Stock Analysis Report
