Is Taylor Morrison Home (TMHC) Stock Undervalued 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Taylor Morrison Home (TMHC) is a stock many investors are watching right now. TMHC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 7.39, which compares to its industry's average of 10.95. TMHC's Forward P/E has been as high as 10.25 and as low as 2.22, with a median of 8.08, all within the past year.
Investors will also notice that TMHC has a PEG ratio of 1.28. 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. TMHC's PEG compares to its industry's average PEG of 2.18. Over the past 52 weeks, TMHC's PEG has been as high as 1.68 and as low as 1.28, with a median of 1.37.
Investors should also recognize that TMHC has a P/B ratio of 0.91. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. TMHC's current P/B looks attractive when compared to its industry's average P/B of 1.27. Within the past 52 weeks, TMHC's P/B has been as high as 1.18 and as low as 0.29, with a median of 0.92.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. TMHC has a P/S ratio of 0.56. This compares to its industry's average P/S of 0.77.
These are just a handful of the figures considered in Taylor Morrison Home'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 TMHC 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.