Are Investors Undervaluing The ODP Corporation (ODP) 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.
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.
The ODP Corporation (ODP) is a stock many investors are watching right now. ODP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.66, which compares to its industry's average of 18.84. ODP's Forward P/E has been as high as 10.40 and as low as 7.68, with a median of 8.50, all within the past year.
Investors should also note that ODP holds a PEG ratio of 0.69. 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. ODP's PEG compares to its industry's average PEG of 1.78. Over the past 52 weeks, ODP's PEG has been as high as 0.74 and as low as 0.55, with a median of 0.61.
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. ODP has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.55.
Finally, we should also recognize that ODP has a P/CF ratio of 7.03. 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 22.01. Over the past year, ODP's P/CF has been as high as 8.12 and as low as 5.37, with a median of 5.97.
These are only a few of the key metrics included in The ODP Corporation's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ODP looks like an impressive value stock at the moment.
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The ODP Corporation (ODP) : Free Stock Analysis Report
