Is Takeda Pharmaceutical Co. (TAK) a Great Value Stock Right Now?

TAK

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

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.

Another notable valuation metric for TAK is its P/B ratio of 1.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. TAK's current P/B looks attractive when compared to its industry's average P/B of 1.31. TAK's P/B has been as high as 1.17 and as low as 0.80, with a median of 1.05, over the past year.

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. TAK has a P/S ratio of 1.6. This compares to its industry's average P/S of 3.34.

Finally, we should also recognize that TAK has a P/CF ratio of 6.65. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. TAK's P/CF compares to its industry's average P/CF of 8.65. Within the past 12 months, TAK's P/CF has been as high as 8.14 and as low as 6.40, with a median of 7.14.

These are only a few of the key metrics included in Takeda Pharmaceutical Co.'s strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TAK looks like an impressive value stock at the moment.

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