Are Investors Undervaluing Intel (INTC) 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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Intel (INTC) is a stock many investors are watching right now. INTC 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 10.96. This compares to its industry's average Forward P/E of 20.52. INTC's Forward P/E has been as high as 14.18 and as low as 8.93, with a median of 12.13, all within the past year.
We also note that INTC holds a PEG ratio of 1.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. INTC's PEG compares to its industry's average PEG of 2.48. Over the past 52 weeks, INTC's PEG has been as high as 1.89 and as low as 1.19, with a median of 1.62.
We should also highlight that INTC has a P/B ratio of 2.78. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. INTC's current P/B looks attractive when compared to its industry's average P/B of 5.48. INTC's P/B has been as high as 3.79 and as low as 2.47, with a median of 3.26, over the past year.
Finally, investors will want to recognize that INTC has a P/CF ratio of 6.48. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.03. Over the past year, INTC's P/CF has been as high as 9.39 and as low as 5.77, with a median of 7.62.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Intel is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, INTC feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.