Are Investors Undervaluing Funko (FNKO) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company value investors might notice is Funko (FNKO). FNKO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
Investors will also notice that FNKO has 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. FNKO's industry currently sports an average PEG of 1.42. FNKO's PEG has been as high as 1.27 and as low as 0.23, with a median of 0.60, all within the past year.
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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. FNKO has a P/S ratio of 0.49. This compares to its industry's average P/S of 0.73.
Finally, we should also recognize that FNKO has a P/CF ratio of 6.76. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 16.85. Within the past 12 months, FNKO's P/CF has been as high as 10.67 and as low as 2.10, with a median of 5.45.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Funko is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FNKO feels like a great value stock at the moment.
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