In the current turbulent market, a silver lining emerges with numerous stocks trading at a discount. Many companies, despite the market pressure, continue to thrive. Leveraging the Zacks Rank is one way to identify these resilient performers. One such standout stock is Build-A-Bear Workshop (BBW), boasting a Zacks Rank #1 (Strong Buy).
The company is structured into three segments: Direct-to-Consumer, Commercial, and International Franchising. Their merchandise ranges from various plush products, both pre-stuffed and for customers to stuff themselves, to sounds and scents that can be added to the stuffed animals. Additionally, they offer a wide array of clothing, shoes, accessories, and other toy and novelty items, including family sleepwear.
Build-A-Bear Workshop's attractiveness as an investment is rooted in its strong Zacks Rank, supported by rising earnings estimates. Projections for the current and upcoming quarters, as well as the next year, have all been revised upwards. This has led to a noteworthy 16.88% year-over-year growth in the Current Year Zacks Consensus Estimate, with a further 9.26% increase expected for the following year.
BBW's current forward Price-to-Earnings (PE) ratio stands at 6.78x earnings, a significant discount when compared to the industry average of 11.4x and the S&P 500's 18.3x. Such a low PE ratio is unusual for a stock with growth projections as promising as Build-A-Bear's. Additionally, the stock is trading at a modest 0.74 multiple of sales, solidifying its position as a value play in the market.
The company bounced back with a 39% earnings beat last quarter, despite an earlier miss. Estimates are rising, but the stock has dropped from previous highs near $30, mirroring a similar pattern from the prior year.
Build-A-Bear Workshop, with its growth potential, attractive valuation, and earnings track record, is an appealing option for investors in the current market. Amid market volatility, the company shows promise for potential gains ahead.
