Are Investors Undervaluing Daktronics (DAKT) 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.

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.

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.

One stock to keep an eye on is Daktronics (DAKT). DAKT is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 19.28, while its industry has an average P/E of 33.38. Over the last 12 months, DAKT's Forward P/E has been as high as 20.96 and as low as 11.24, with a median of 14.60.

We also note that DAKT holds a PEG ratio of 0.64. 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. DAKT's industry currently sports an average PEG of 1.43. Over the last 12 months, DAKT's PEG has been as high as 0.70 and as low as 0.37, with a median of 0.49.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DAKT has a P/S ratio of 1.14. This compares to its industry's average P/S of 2.41.

Finally, we should also recognize that DAKT has a P/CF ratio of 35.81. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. DAKT's P/CF compares to its industry's average P/CF of 61.44. Within the past 12 months, DAKT's P/CF has been as high as 88.78 and as low as 13.62, with a median of 27.56.

These are just a handful of the figures considered in Daktronics's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DAKT is an impressive value stock right now.

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

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