Are Investors Undervaluing Taylor Morrison Home (TMHC) 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.
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 Taylor Morrison Home (TMHC). TMHC 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 7.30, which compares to its industry's average of 10.48. Over the past year, TMHC's Forward P/E has been as high as 7.46 and as low as 2.72, with a median of 5.58.
Another notable valuation metric for TMHC is its P/B ratio of 1.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.46. TMHC's P/B has been as high as 1.12 and as low as 0.57, with a median of 0.77, over the past year.
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. TMHC has a P/S ratio of 0.68. This compares to its industry's average P/S of 0.81.
Finally, investors should note that TMHC has a P/CF ratio of 4.99. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 6.72. Over the past year, TMHC's P/CF has been as high as 4.99 and as low as 2.44, with a median of 3.47.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Taylor Morrison Home is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TMHC feels like a great value stock at the moment.
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Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
