Is Graphic Packaging (GPK) Stock Undervalued 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One stock to keep an eye on is Graphic Packaging (GPK). GPK is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 13.01, while its industry has an average P/E of 15.38. GPK's Forward P/E has been as high as 19.06 and as low as 10.84, with a median of 13.94, all within the past year.
We also note that GPK holds a PEG ratio of 0.52. 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. GPK's PEG compares to its industry's average PEG of 1.24. GPK's PEG has been as high as 1.23 and as low as 0.43, with a median of 0.56, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPK has a P/S ratio of 0.64. This compares to its industry's average P/S of 1.07.
Finally, we should also recognize that GPK has a P/CF ratio of 7.04. 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. GPK's P/CF compares to its industry's average P/CF of 20.13. GPK's P/CF has been as high as 7.59 and as low as 4.68, with a median of 6.88, all within the past year.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.