Should Value Investors Buy Sanofi (SNY) Stock?
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 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 stock to keep an eye on is Sanofi (SNY). SNY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 12.97, while its industry has an average P/E of 14.32. Over the last 12 months, SNY's Forward P/E has been as high as 14.20 and as low as 11.82, with a median of 13.09.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. SNY has a P/S ratio of 2.78. This compares to its industry's average P/S of 3.76.
Finally, we should also recognize that SNY has a P/CF ratio of 13.19. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. SNY's current P/CF looks attractive when compared to its industry's average P/CF of 14.57. SNY's P/CF has been as high as 13.19 and as low as 10.62, with a median of 11.62, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Sanofi is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SNY feels like a great value stock at the moment.
Click to get this free report
Sanofi (SNY): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.