Are Investors Undervaluing Sleep Number (SNBR) Right Now?
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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Sleep Number (SNBR) is a stock many investors are watching right now. SNBR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 16.65 right now. For comparison, its industry sports an average P/E of 18.96. SNBR's Forward P/E has been as high as 28.15 and as low as 13.78, with a median of 17.54, all within the past year.
Finally, investors should note that SNBR has a P/CF ratio of 13.39. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.78. Over the past year, SNBR's P/CF has been as high as 20.54 and as low as 6.61, with a median of 12.26.
These are only a few of the key metrics included in Sleep Number'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, SNBR looks like an impressive value stock at the moment.
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