Are Investors Undervaluing Leidos (LDOS) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Leidos (LDOS) is a stock many investors are watching right now. LDOS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 16.01, which compares to its industry's average of 25.49. Over the last 12 months, LDOS's Forward P/E has been as high as 22.35 and as low as 12.18, with a median of 16.25.
Finally, investors should note that LDOS has a P/CF ratio of 16.48. 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. LDOS's P/CF compares to its industry's average P/CF of 20.36. Over the past year, LDOS's P/CF has been as high as 19.46 and as low as 11.18, with a median of 15.91.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Leidos is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LDOS feels like a great value stock at the moment.
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