Back to top

Image: Bigstock

Is Sysco (SYY) Stock Undervalued Right Now?

Read MoreHide Full Article

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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Sysco (SYY - Free Report) is a stock many investors are watching right now. SYY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.05, which compares to its industry's average of 16.57. Over the last 12 months, SYY's Forward P/E has been as high as 17.98 and as low as 14.35, with a median of 16.33.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SYY has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.94.

Finally, we should also recognize that SYY has a P/CF ratio of 12.65. 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. SYY's current P/CF looks attractive when compared to its industry's average P/CF of 17.78. Within the past 12 months, SYY's P/CF has been as high as 13.97 and as low as 11.58, with a median of 12.61.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Sysco Corporation (SYY) - free report >>

Published in