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Should Value Investors Buy Axalta Coating Systems (AXTA) 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.
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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company to watch right now is Axalta Coating Systems (AXTA - Free Report) . AXTA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 16.04. This compares to its industry's average Forward P/E of 20.57. Over the past year, AXTA's Forward P/E has been as high as 20.92 and as low as 13.33, with a median of 17.82.
Investors should also note that AXTA holds a PEG ratio of 1.42. 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. AXTA's PEG compares to its industry's average PEG of 1.83. Over the last 12 months, AXTA's PEG has been as high as 2.13 and as low as 1.03, with a median of 1.49.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. AXTA has a P/S ratio of 1.26. This compares to its industry's average P/S of 1.38.
These are only a few of the key metrics included in Axalta Coating Systems's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AXTA looks like an impressive value stock at the moment.