Is Scholastic (SCHL) a Great Value Stock Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Scholastic (SCHL). SCHL is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SCHL has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.85.

Finally, we should also recognize that SCHL has a P/CF ratio of 6.14. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.58. Over the past 52 weeks, SCHL's P/CF has been as high as 7.72 and as low as 3.52, with a median of 5.81.

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

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Scholastic Corporation (SCHL): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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