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Is DHI Group (DHX) Stock Undervalued 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

DHI Group (DHX - Free Report) is a stock many investors are watching right now. DHX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 10.97, which compares to its industry's average of 21.10. Over the last 12 months, DHX's Forward P/E has been as high as 43.17 and as low as 9.03, with a median of 12.34.

We also note that DHX holds a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DHX's industry has an average PEG of 1.39 right now. Over the last 12 months, DHX's PEG has been as high as 0.68 and as low as 0.58, with a median of 0.65.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DHX has a P/S ratio of 0.55. This compares to its industry's average P/S of 1.18.

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


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