Is Lenovo (LNVGY) a Great Value Stock 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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 stock to keep an eye on is Lenovo (LNVGY). LNVGY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.80 right now. For comparison, its industry sports an average P/E of 15.36. Over the past 52 weeks, LNVGY's Forward P/E has been as high as 20.46 and as low as 9.83, with a median of 14.68.
Investors will also notice that LNVGY has a PEG ratio of 1.66. 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. LNVGY's PEG compares to its industry's average PEG of 1.75. Within the past year, LNVGY's PEG has been as high as 1.88 and as low as 1.47, with a median of 1.64.
Finally, we should also recognize that LNVGY has a P/CF ratio of 6.73. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. LNVGY's P/CF compares to its industry's average P/CF of 11.01. LNVGY's P/CF has been as high as 12.11 and as low as 6.06, with a median of 8.93, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Lenovo is likely undervalued currently. And when considering the strength of its earnings outlook, LNVGY sticks out at as one of the market's strongest value stocks.
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