Is Brinker International (EAT) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 Brinker International (EAT). EAT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 11.46, while its industry has an average P/E of 22.90. Over the last 12 months, EAT's Forward P/E has been as high as 13.96 and as low as 9.15, with a median of 12.06.
We also note that EAT holds a PEG ratio of 1.29. 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. EAT's industry has an average PEG of 1.87 right now. EAT's PEG has been as high as 1.57 and as low as 0.68, with a median of 1.23, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. EAT has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.98.
Finally, investors will want to recognize that EAT has a P/CF ratio of 5.86. 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 15.83. Over the past year, EAT's P/CF has been as high as 8.40 and as low as 5.29, with a median of 6.82.
These are only a few of the key metrics included in Brinker International'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, EAT looks like an impressive value stock at the moment.
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