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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Kforce Inc. (KFRC - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Kforce has a trailing twelve months PE ratio of 17.76, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.38. If we focus on the stock’s long-term PE trend, the current level puts Kforce’s current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Business Service sector’s trailing twelve months PE ratio, which stands at 23.11. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Kforce has a forward PE ratio (price relative to this year’s earnings) of just 16.01, so it is fair to say that a slightly more value-oriented path may be ahead for Kforce stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Kforce has a P/S ratio of just 0.50. This is much lower than the S&P 500 average, which comes in at 3.14 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, KFRC is in the lower half of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Kforce currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Kforce a solid choice for value investors.
What About the Stock Overall?
Though Kforce might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘C’. This gives KFRC a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been seeing a positive trend. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen four up and none down in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has risen by 15% in the past two months, while the full year estimate has increased by 7.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
This positive trend is why the stock sports a Zacks Rank #1 (Strong Buy).
Bottom Line
Kforce is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 27% compared to over 250 industries) further underlines the potential of the company overall. In fact, over the past one year, the Zacks Staffing industry has clearly outperformed the broader market, as you can see below:
So, value investors might want to choose this stock, as it seems to be a compelling pick.
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Is Kforce (KFRC) a Good Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Kforce Inc. (KFRC - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Kforce has a trailing twelve months PE ratio of 17.76, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 20.38. If we focus on the stock’s long-term PE trend, the current level puts Kforce’s current PE ratio below its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the Zacks classified Business Service sector’s trailing twelve months PE ratio, which stands at 23.11. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Kforce has a forward PE ratio (price relative to this year’s earnings) of just 16.01, so it is fair to say that a slightly more value-oriented path may be ahead for Kforce stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Kforce has a P/S ratio of just 0.50. This is much lower than the S&P 500 average, which comes in at 3.14 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, KFRC is in the lower half of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Kforce currently has a Zacks Value Style Score of ‘A’, putting it into the top 20% of all stocks we cover from this look. This makes Kforce a solid choice for value investors.
What About the Stock Overall?
Though Kforce might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘C’. This gives KFRC a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been seeing a positive trend. The current quarter has seen two estimates go higher in the past sixty days compared to none lower, while the full year estimate has seen four up and none down in the same time period.
This has had a significant impact on the consensus estimate though as the current quarter consensus estimate has risen by 15% in the past two months, while the full year estimate has increased by 7.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Kforce, Inc. Price and Consensus
Kforce, Inc. Price and Consensus | Kforce, Inc. Quote
This positive trend is why the stock sports a Zacks Rank #1 (Strong Buy).
Bottom Line
Kforce is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 27% compared to over 250 industries) further underlines the potential of the company overall. In fact, over the past one year, the Zacks Staffing industry has clearly outperformed the broader market, as you can see below:
So, value investors might want to choose this stock, as it seems to be a compelling pick.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>