Is Tri Pointe Homes (TPH) 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...
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.
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 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.
One stock to keep an eye on is Tri Pointe Homes (TPH). TPH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 6 right now. For comparison, its industry sports an average P/E of 6.94. Over the last 12 months, TPH's Forward P/E has been as high as 9.46 and as low as 5.44, with a median of 7.07.
We should also highlight that TPH has a P/B ratio of 1.19. The P/B is a method of comparing a stock's market value to 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 1.52. Over the past year, TPH's P/B has been as high as 1.36 and as low as 0.93, with a median of 1.13.
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. TPH has a P/S ratio of 0.71. This compares to its industry's average P/S of 0.75.
Finally, our model also underscores that TPH has a P/CF ratio of 5.72. 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. TPH's P/CF compares to its industry's average P/CF of 7.99. TPH's P/CF has been as high as 8.39 and as low as 4.90, with a median of 6.91, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Tri Pointe Homes is likely undervalued currently. And when considering the strength of its earnings outlook, TPH sticks out at as one of the market's strongest value stocks.
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Tri Pointe Homes Inc. (TPH): Free Stock Analysis Report
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