Is Ruth's Hospitality (RUTH) Stock Undervalued Right Now?

By Zacks Investment ResearchStock MarketsMar 01, 2020 11:50PM ET

www.investing.com/analysis/is-ruths-hospitality-ruth-stock-undervalued-right-now-200512545

Is Ruth's Hospitality (RUTH) Stock Undervalued Right Now?

By Zacks Investment Research | Mar 01, 2020 11:50PM ET

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.

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 company to watch right now is Ruth's Hospitality (RUTH). RUTH is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 12.07. This compares to its industry's average Forward P/E of 26.10. Over the last 12 months, RUTH's Forward P/E has been as high as 18.26 and as low as 12.07, with a median of 15.33.

Investors will also notice that RUTH has a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RUTH's PEG compares to its industry's average PEG of 2.34. Within the past year, RUTH's PEG has been as high as 1.29 and as low as 0.89, with a median of 1.09.

Finally, investors will want to recognize that RUTH has a P/CF ratio of 8.54. 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. RUTH's P/CF compares to its industry's average P/CF of 17.37. Within the past 12 months, RUTH's P/CF has been as high as 13.05 and as low as 8.54, with a median of 10.78.

These are just a handful of the figures considered in Ruth's Hospitality's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RUTH is an impressive value stock right now.

Ruth's Hospitality Group, Inc. (RUTH): Free Stock Analysis Report

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Is Ruth's Hospitality (RUTH) Stock Undervalued Right Now?

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