Are investors undervaluing Citi Trends (CTRN) right now? – September 14, 2021


At Zacks, we focus on Zacks’ proven ranking system, which emphasizes profit estimates and estimate revisions to find great stocks. Nevertheless, we are always attentive to the latest trends in value, growth and dynamism to highlight the right choices.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven successful in all kinds of market environments. Value investors use proven metrics and fundamental analysis to find companies they believe are undervalued at their current stock price level.

In addition to the Zacks Rankings, investors can also use our innovative style score system to find stocks with specific characteristics. For example, value investors will want to focus on the “Value” category. Stocks with high Zacks ranks and “A” ratings for value will be some of the highest quality value stocks on the market today.

One company that investors might notice is Citi Trends (CTRN Free report). CTRN currently sports a Zacks ranking of # 1 (strong buy) and an A for value. The stock holds a P / E ratio of 11.56, while its sector has an average P / E of 15.80. Over the past 52 weeks, the term P / E of CTRN has been as high as 35.21 and as low as 11.56, with a median of 17.73.

Another valuation metric we need to highlight is CTRN’s P / N ratio of 4.97. Investors use the P / B ratio to compare the market value of a stock against its book value, which is defined as total assets minus total liabilities. This stock’s P / B looks strong relative to its industry’s average P / B of 6.12. Over the past 12 months, the P / B of CTRN has been as high as 6.73 and as low as 1.48, with a median of 4.83.

Value investors also frequently use the P / S ratio. This measurement is obtained by dividing the price of a stock by the turnover of the company. This is a popular metric because sales are more difficult to manipulate on an income statement, so they are often seen as a better indicator of performance. CTRN has a P / S ratio of 0.69. This compares to its industry’s average P / S of 0.71.

Value investors will likely look at more than these metrics, but the data above shows that Citi Trends is likely undervalued right now. And given its strong earnings outlook, CTRN stands out as one of the strongest value stocks on the market.

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