Should Value Investors Buy Canada Goose (GOOS) Stock?

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Canada Goose (GOOS). GOOS is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.88, while its industry has an average P/E of 17.61. Over the past year, GOOS's Forward P/E has been as high as 16.45 and as low as 8.09, with a median of 11.61.

GOOS is also sporting a PEG ratio of 0.95. 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. GOOS's industry currently sports an average PEG of 1.32. GOOS's PEG has been as high as 1.05 and as low as 0.48, with a median of 0.66, all within the past year.

Investors should also recognize that GOOS has a P/B ratio of 4.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.60. Over the past 12 months, GOOS's P/B has been as high as 4.72 and as low as 1.67, with a median of 3.33.

Finally, our model also underscores that GOOS has a P/CF ratio of 10.51. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.74. Within the past 12 months, GOOS's P/CF has been as high as 11.70 and as low as 4.17, with a median of 6.87.

Urban Outfitters (URBN) may be another strong Retail - Apparel and Shoes stock to add to your shortlist. URBN is a Zacks Rank of #1 (Strong Buy) stock with a Value grade of A.

Shares of Urban Outfitters currently hold a Forward P/E ratio of 13.05, and its PEG ratio is 1.07. In comparison, its industry sports average P/E and PEG ratios of 17.61 and 1.32.

URBN's price-to-earnings ratio has been as high as 15.49 and as low as 9.10, with a median of 12.80, while its PEG ratio has been as high as 1.78 and as low as 0.80, with a median of 1.11, all within the past year.

Urban Outfitters also has a P/B ratio of 2.48 compared to its industry's price-to-book ratio of 6.60. Over the past year, its P/B ratio has been as high as 2.97, as low as 1.40, with a median of 2.14.

These are only a few of the key metrics included in Canada Goose and Urban Outfitters strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, GOOS and URBN look like an impressive value stock at the moment.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research