Are Investors Undervaluing Leidos (LDOS) 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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Leidos (LDOS). LDOS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 14.66 right now. For comparison, its industry sports an average P/E of 19.68. LDOS's Forward P/E has been as high as 15.42 and as low as 11.30, with a median of 13.58, all within the past year.
Investors will also notice that LDOS has a PEG ratio of 1.81. 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. LDOS's PEG compares to its industry's average PEG of 2.22. Over the last 12 months, LDOS's PEG has been as high as 2.67 and as low as 1.43, with a median of 1.72.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LDOS has a P/S ratio of 1.01. This compares to its industry's average P/S of 1.6.
Finally, investors will want to recognize that LDOS has a P/CF ratio of 13.91. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. LDOS's current P/CF looks attractive when compared to its industry's average P/CF of 21.73. Over the past 52 weeks, LDOS's P/CF has been as high as 14.05 and as low as 10.51, with a median of 12.60.
These are just a handful of the figures considered in Leidos's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LDOS is an impressive value stock right now.
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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
