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Is Green Dot (GDOT) a Great Value Stock Right Now?

Zacks Equity Research

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Green Dot (GDOT). GDOT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.34. This compares to its industry's average Forward P/E of 26.52. Over the last 12 months, GDOT's Forward P/E has been as high as 26.63 and as low as 7.34, with a median of 15.65.

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Finally, investors should note that GDOT has a P/CF ratio of 7.93. 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. GDOT's P/CF compares to its industry's average P/CF of 25.70. Over the past year, GDOT's P/CF has been as high as 26.88 and as low as 6.18, with a median of 16.56.

These are just a handful of the figures considered in Green Dot'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 GDOT is an impressive value stock right now.


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