Are Investors Undervaluing Takeda Pharmaceutical Co. (TAK) Right Now?

TAK

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 company value investors might notice is Takeda Pharmaceutical Co. (TAK - Free Report) . TAK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

We should also highlight that TAK has a P/B ratio of 1.24. Investors use the P/B ratio to look at a stock's market value versus 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 1.54. Over the past 12 months, TAK's P/B has been as high as 1.41 and as low as 0.90, with a median of 1.28.

Finally, our model also underscores that TAK has a P/CF ratio of 7.74. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. TAK's current P/CF looks attractive when compared to its industry's average P/CF of 11.28. Over the past year, TAK's P/CF has been as high as 10.50 and as low as 6.67, with a median of 9.08.

These are just a handful of the figures considered in Takeda Pharmaceutical Co.'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 TAK is an impressive value stock right now.

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