Is Fresenius (FMS) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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.
One company to watch right now is Fresenius (FMS). FMS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 15.13 right now. For comparison, its industry sports an average P/E of 40.29. Over the last 12 months, FMS's Forward P/E has been as high as 18.14 and as low as 10.57, with a median of 13.97.
We also note that FMS holds a PEG ratio of 1.97. 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. FMS's PEG compares to its industry's average PEG of 3.37. Over the last 12 months, FMS's PEG has been as high as 3.69 and as low as 1.97, with a median of 2.36.
Investors should also recognize that FMS has a P/B ratio of 1.75. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.08. Over the past year, FMS's P/B has been as high as 1.89 and as low as 1.18, with a median of 1.48.
Finally, investors should note that FMS has a P/CF ratio of 7.66. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 24.60. FMS's P/CF has been as high as 8.30 and as low as 5.59, with a median of 7.49, 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 Fresenius is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FMS feels like a great value stock at the moment.
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Fresenius Medical Care AG Co. KGaA (FMS) : Free Stock Analysis Report
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