Are Investors Undervaluing Axalta Coating Systems (AXTA) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Axalta Coating Systems (AXTA). AXTA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 19.28, while its industry has an average P/E of 21.34. Over the past year, AXTA's Forward P/E has been as high as 20.92 and as low as 10.95, with a median of 16.36.
We also note that AXTA holds a PEG ratio of 1.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AXTA's industry has an average PEG of 1.78 right now. Over the past 52 weeks, AXTA's PEG has been as high as 2.13 and as low as 0.69, with a median of 1.29.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AXTA has a P/S ratio of 1.42. This compares to its industry's average P/S of 1.46.
Finally, investors will want to recognize that AXTA has a P/CF ratio of 14.24. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.25. Over the past 52 weeks, AXTA's P/CF has been as high as 14.47 and as low as 8.84, with a median of 11.98.
Value investors will likely look at more than just these metrics, but the above data helps show that Axalta Coating Systems is likely undervalued currently. And when considering the strength of its earnings outlook, AXTA sticks out at as one of the market's strongest value stocks.
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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
