Yahoo Finance Are Investors Undervaluing Brinker International (EAT) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
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 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 Brinker International (EAT). EAT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 15.99, which compares to its industry's average of 22.43. EAT's Forward P/E has been as high as 16.67 and as low as 8.41, with a median of 11.36, all within the past year.
We also note that EAT holds a PEG ratio of 0.78. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EAT's industry has an average PEG of 1.93 right now. EAT's PEG has been as high as 1.92 and as low as 0.56, with a median of 0.74, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EAT has a P/S ratio of 0.76. This compares to its industry's average P/S of 0.77.
Finally, investors should note that EAT has a P/CF ratio of 10.05. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 16.52. Over the past 52 weeks, EAT's P/CF has been as high as 10.29 and as low as 4.34, with a median of 6.22.
These are only a few of the key metrics included in Brinker International'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, EAT looks like an impressive value stock at the moment.
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Brinker International, Inc. (EAT) : Free Stock Analysis Report
