Are Investors Undervaluing Chico's FAS (CHS) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Chico's FAS (CHS) is a stock many investors are watching right now. CHS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHS has a P/S ratio of 0.1. This compares to its industry's average P/S of 0.29.

Finally, investors should note that CHS has a P/CF ratio of 2.38. 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. CHS's P/CF compares to its industry's average P/CF of 8.59. Over the past 52 weeks, CHS's P/CF has been as high as 8.97 and as low as 1.46, with a median of 4.63.

Value investors will likely look at more than just these metrics, but the above data helps show that Chico's FAS is likely undervalued currently. And when considering the strength of its earnings outlook, CHS sticks out at as one of the market's strongest value stocks.

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