Should Value Investors Buy Leidos (LDOS) Stock?
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 holds a P/E ratio of 14.33, while its industry has an average P/E of 22.20. Over the past 52 weeks, LDOS's Forward P/E has been as high as 16.49 and as low as 11.30, with a median of 13.58.
LDOS is also sporting a PEG ratio of 1.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LDOS's industry currently sports an average PEG of 1.93. Over the past 52 weeks, 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 0.98. This compares to its industry's average P/S of 1.56.
Finally, investors will want to recognize that LDOS has a P/CF ratio of 13.42. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 22.27. Within the past 12 months, LDOS's P/CF has been as high as 14.32 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
