Is GMS Inc. (GMS) a Great Value Stock Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is GMS Inc. (GMS). GMS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 7.25. This compares to its industry's average Forward P/E of 18.32. Over the last 12 months, GMS's Forward P/E has been as high as 17.69 and as low as 7.25, with a median of 13.84.
Investors should also note that GMS holds a PEG ratio of 1.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GMS's PEG compares to its industry's average PEG of 1.21. Over the past 52 weeks, GMS's PEG has been as high as 2.53 and as low as 1.04, with a median of 1.81.
Finally, we should also recognize that GMS has a P/CF ratio of 8.03. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 14.70. Within the past 12 months, GMS's P/CF has been as high as 12.85 and as low as 8.03, with a median of 10.03.
These figures are just a handful of the metrics value investors tend to look at, but they help show that GMS Inc. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, GMS feels like a great value stock at the moment.
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