Should Value Investors Buy Lenovo (LNVGY) Stock?
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.
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.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Lenovo (LNVGY) is a stock many investors are watching right now. LNVGY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.19, which compares to its industry's average of 15.73. Over the past year, LNVGY's Forward P/E has been as high as 20.46 and as low as 12.19, with a median of 14.72.
We also note that LNVGY holds a PEG ratio of 1.66. 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. LNVGY's industry currently sports an average PEG of 1.79. Within the past year, LNVGY's PEG has been as high as 1.88 and as low as 1.47, with a median of 1.64.
Finally, we should also recognize that LNVGY has a P/CF ratio of 7.63. 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 11.28. LNVGY's P/CF has been as high as 12.11 and as low as 6.06, with a median of 9.58, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Lenovo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LNVGY feels like a great value stock at the moment.
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Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report
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