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Is Graphic Packaging (GPK) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Graphic Packaging (GPK - Free Report) is a stock many investors are watching right now. GPK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 12.53, which compares to its industry's average of 15.42. Over the last 12 months, GPK's Forward P/E has been as high as 19.06 and as low as 10.84, with a median of 14.10.

We also note that GPK holds a PEG ratio of 0.50. 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. GPK's PEG compares to its industry's average PEG of 1.25. Within the past year, GPK's PEG has been as high as 1.23 and as low as 0.43, with a median of 0.56.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GPK has a P/S ratio of 0.62. This compares to its industry's average P/S of 0.99.

Finally, our model also underscores that GPK has a P/CF ratio of 6.75. 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 20.13. Within the past 12 months, GPK's P/CF has been as high as 7.59 and as low as 4.68, with a median of 6.84.

These are just a handful of the figures considered in Graphic Packaging'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 GPK is an impressive value stock right now.


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