Is Perrigo (PRGO) Stock Undervalued 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, 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.
Perrigo (PRGO) is a stock many investors are watching right now. PRGO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.96 right now. For comparison, its industry sports an average P/E of 22.23. PRGO's Forward P/E has been as high as 16.89 and as low as 11.09, with a median of 13.42, all within the past year.
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. PRGO has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.61.
Finally, our model also underscores that PRGO has a P/CF ratio of 20.60. 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. This stock's P/CF looks attractive against its industry's average P/CF of 32.63. Within the past 12 months, PRGO's P/CF has been as high as 32.80 and as low as 20.43, with a median of 25.17.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Perrigo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PRGO feels like a great value stock at the moment.
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Perrigo Company plc (PRGO) : Free Stock Analysis Report
