Are Investors Undervaluing Teva Pharmaceutical Industries (TEVA) 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.
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 Teva Pharmaceutical Industries (TEVA). TEVA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5. This compares to its industry's average Forward P/E of 11.24. Over the past 52 weeks, TEVA's Forward P/E has been as high as 5 and as low as 2.99, with a median of 3.85.
We also note that TEVA holds a PEG ratio of 1.16. 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. TEVA's PEG compares to its industry's average PEG of 2. Over the last 12 months, TEVA's PEG has been as high as 2.89 and as low as 0.77, with a median of 1.27.
We should also highlight that TEVA has a P/B ratio of 1.79. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.85. Over the past year, TEVA's P/B has been as high as 1.79 and as low as 0.94, with a median of 1.29.
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. TEVA has a P/S ratio of 0.88. This compares to its industry's average P/S of 1.8.
These are just a handful of the figures considered in Teva Pharmaceutical Industries'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 TEVA is an impressive value stock right now.
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Teva Pharmaceutical Industries Ltd. (TEVA) : Free Stock Analysis Report
