Is Leidos (LDOS) Stock Undervalued 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 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 sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.70, which compares to its industry's average of 21.72. Over the past year, LDOS's Forward P/E has been as high as 15.42 and as low as 11.30, with a median of 13.58.
Investors will also notice that LDOS has a PEG ratio of 1.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LDOS's industry currently sports an average PEG of 1.85. Within the past year, 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 use the P/S ratio. The P/S ratio is is calculated as price divided by 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. This compares to its industry's average P/S of 1.68.
Finally, investors will want to recognize that LDOS has a P/CF ratio of 13.88. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. LDOS's P/CF compares to its industry's average P/CF of 22.14. Over the past 52 weeks, LDOS's P/CF has been as high as 14.01 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
