Is Graphic Packaging Holding Company (GPK) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Graphic Packaging Holding Company (GPK). GPK is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.41, which compares to its industry's average of 12.42. Over the last 12 months, GPK's Forward P/E has been as high as 9.74 and as low as 7.29, with a median of 8.62.
Investors should also recognize that GPK has a P/B ratio of 2.66. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. GPK's current P/B looks attractive when compared to its industry's average P/B of 7.66. Within the past 52 weeks, GPK's P/B has been as high as 3.67 and as low as 2.62, with a median of 3.32.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPK has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.78.
Finally, investors should note that GPK has a P/CF ratio of 5.07. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. GPK's current P/CF looks attractive when compared to its industry's average P/CF of 18.70. GPK's P/CF has been as high as 7.54 and as low as 4.98, with a median of 6.59, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Graphic Packaging Holding Company is likely undervalued currently. And when considering the strength of its earnings outlook, GPK sticks out at as one of the market's strongest value stocks.
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Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
