Should Value Investors Buy Fox Factory Holdings (FOXF) 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.

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.

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 stock to keep an eye on is Fox Factory Holdings (FOXF). FOXF is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A.

Investors will also notice that FOXF has a PEG ratio of 1.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FOXF's industry has an average PEG of 3.32 right now. FOXF's PEG has been as high as 2.46 and as low as 1.33, with a median of 1.64, 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FOXF has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.73.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Fox Factory Holdings is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FOXF feels like a great value stock at the moment.

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

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