Macy's Inc M shares have left the S&P 500 in the dust in 2021, gaining 227.6% year-to-date.

Macy's stock has had a wild ride in recent years, but investors may be wondering whether there’s any value in Macy's shares after the big gains.

Earnings: A price-to-earnings ratio (PE) is one of the most basic fundamental metrics for gauging a stock’s value. The lower the PE, the higher the value.

For comparison, the S&P 500’s PE is currently at about 29.4, nearly double its long-term average of 15.9. Macy's PE is 18.9, about 35% lower than the S&P 500 average as a whole.

Growth: Looking ahead to the next four quarters, the S&P 500's forward PE ratio looks much more reasonable at just 21.4. Macy's forward earnings multiple of 9.1 is less than half the S&P 500’s, making Macy's look extremely undervalued.

Macy's forward PE ratio is also less than a third of the average multiple of its consumer discretionary peers, which are averaging a 32.5 forward earnings multiple.

Yet when it comes to evaluating a stock, earnings aren't everything.

The growth rate is also critical for companies that are rapidly building their bottom lines. The price-to-earnings-to-growth ratio (PEG) is a good way to incorporate growth rates into the evaluation process. The S&P 500’s overall PEG is currently about 1.0; Macy's PEG is 0.91, suggesting Macy's is still undervalued after accounting for its growth.

Price-to-sales ratio is another important valuation metric, particularly for unprofitable companies and growth stocks. The S&P 500’s PS ratio is currently 3.2, well above its long-term average of 1.63. Macy's PS ratio is 0.44, only a fraction of the S&P 500 average as a whole. Macy's PS ratio is also up 2.8% over the past five years, suggesting the stock is priced at the high end of its historical valuation range.

Finally, Wall Street analysts see no value in Macy's stock over the next 12 months. The average analyst price target among the 13 analysts covering Macy's is $27, suggesting 26.7% downside from current levels.

The Verdict: At its current price, Macy's stock appears to be undervalued based on a sampling of common fundamental valuation metrics.