Should Value Investors Buy Cricut (CRCT) Stock?

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 company to watch right now is Cricut (CRCT). CRCT is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CRCT has a P/S ratio of 1.78. This compares to its industry's average P/S of 1.82.

Finally, we should also recognize that CRCT has a P/CF ratio of 14.98. 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. CRCT's current P/CF looks attractive when compared to its industry's average P/CF of 37.06. Within the past 12 months, CRCT's P/CF has been as high as 16.17 and as low as 9.27, with a median of 13.30.

These are just a handful of the figures considered in Cricut'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 CRCT 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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