Here's Why Grocery Outlet Holding Corp. (GO) is a Strong Value Stock

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

Grocery Outlet Holding Corp. (GO)

Founded in 1946 and headquartered in Emeryville, CA, Grocery Outlet Holding Corp. is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products that are sold through a network of independently owned and operated stores. Notably, the company's stores offer a fun, treasure hunt shopping experience in an easy-to-navigate, “small-box” format of size 15,000-20,000 square feet. The company offers discounted, overstocked and closeout products from name brand and private label suppliers. Stores are operated by Entrepreneurial Independent Operators (“IOs”).

GO is a Zacks Rank #2 (Buy) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 41X for the current fiscal year compared to the Consumer Products - Staples industry's P/E of 15.8X. Additionally, GO has a PEG Ratio of 3.5 and a Price/Cash Flow ratio of 23.8X. Value investors should also note GO's Price/Sales ratio of 1.2X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.02 to $0.99 per share. GO has an average earnings surprise of 10%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding GO to their portfolios.

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