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Are Investors Undervaluing BuildABear Workshop (BBW) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is BuildABear Workshop (BBW - Free Report) . BBW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 9.55. This compares to its industry's average Forward P/E of 16.55. Over the last 12 months, BBW's Forward P/E has been as high as 10.06 and as low as 5.95, with a median of 6.84.

Finally, investors should note that BBW has a P/CF ratio of 7.76. 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. BBW's current P/CF looks attractive when compared to its industry's average P/CF of 19.42. Over the past year, BBW's P/CF has been as high as 8.17 and as low as 4.66, with a median of 5.77.

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


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