Is LabCorp (LH) 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...
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
LabCorp (LH) is a stock many investors are watching right now. LH is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 16.09, while its industry has an average P/E of 19.36. Over the past 52 weeks, LH's Forward P/E has been as high as 16.41 and as low as 10.55, with a median of 13.36.
LH is also sporting a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LH's PEG compares to its industry's average PEG of 1.54. LH's PEG has been as high as 1.55 and as low as 1.04, with a median of 1.27, all within the past year.
Another notable valuation metric for LH is its P/B ratio of 2.63. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LH's current P/B looks attractive when compared to its industry's average P/B of 6.15. Over the past 12 months, LH's P/B has been as high as 2.94 and as low as 2.12, with a median of 2.54.
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. LH has a P/S ratio of 1.66. This compares to its industry's average P/S of 2.88.
These figures are just a handful of the metrics value investors tend to look at, but they help show that LabCorp is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LH feels like a great value stock at the moment.
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Laboratory Corporation of America Holdings (LH): Free Stock Analysis Report
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