Yahoo Finance Are Investors Undervaluing Dell Technologies (DELL) Right Now?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
One company value investors might notice is Dell Technologies (DELL). DELL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 15.26. This compares to its industry's average Forward P/E of 34.32. DELL's Forward P/E has been as high as 17.30 and as low as 7.63, with a median of 10.21, all within the past year.
Investors should also note that DELL holds a PEG ratio of 1.27. 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. DELL's industry currently sports an average PEG of 2.69. Within the past year, DELL's PEG has been as high as 1.44 and as low as 0.64, with a median of 0.85.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DELL has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.88.
Value investors will likely look at more than just these metrics, but the above data helps show that Dell Technologies is likely undervalued currently. And when considering the strength of its earnings outlook, DELL sticks out at as one of the market's strongest value stocks.
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