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Is Hibbett Sports (HIBB) Stock Undervalued Right Now?

Zacks Equity Research

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

Hibbett Sports (HIBB) is a stock many investors are watching right now. HIBB is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 8, while its industry has an average P/E of 13.34. Over the past year, HIBB's Forward P/E has been as high as 13.17 and as low as 6.79, with a median of 10.11.

We also note that HIBB holds a PEG ratio of 0.74. 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. HIBB's industry currently sports an average PEG of 1.38. Over the past 52 weeks, HIBB's PEG has been as high as 5.45 and as low as 0.62, with a median of 1.32.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HIBB has a P/S ratio of 0.3. This compares to its industry's average P/S of 0.35.

Finally, we should also recognize that HIBB has a P/CF ratio of 5.72. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 18.02. Over the past year, HIBB's P/CF has been as high as 7.57 and as low as 4.40, with a median of 5.67.

These are only a few of the key metrics included in Hibbett Sports'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, HIBB looks like an impressive value stock at the moment.


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