Is Vipshop (VIPS) a Great Value Stock Right Now?

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One stock to keep an eye on is Vipshop (VIPS). VIPS is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 6.96 right now. For comparison, its industry sports an average P/E of 11.28. Over the past 52 weeks, VIPS's Forward P/E has been as high as 7.28 and as low as 4.92, with a median of 5.91.

Another valuation metric that we should highlight is VIPS's P/B ratio of 1.64. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. VIPS's current P/B looks attractive when compared to its industry's average P/B of 2.82. Over the past year, VIPS's P/B has been as high as 1.69 and as low as 1.09, with a median of 1.33.

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. VIPS has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.62.

Finally, we should also recognize that VIPS has a P/CF ratio of 7.96. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.06. VIPS's P/CF has been as high as 8.18 and as low as 5.08, with a median of 6.08, all within the past year.

These are only a few of the key metrics included in Vipshop'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, VIPS looks like an impressive value stock at the moment.