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Is LabCorp (LH) a Great Value Stock Right Now?

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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.

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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 LabCorp (LH - Free Report) . LH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.55, while its industry has an average P/E of 17.46. Over the last 12 months, LH's Forward P/E has been as high as 18.15 and as low as 8.57, with a median of 14.17.

Investors will also notice that LH has a PEG ratio of 1.04. 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. LH's industry currently sports an average PEG of 2.44. Over the last 12 months, LH's PEG has been as high as 3.50 and as low as 1.04, with a median of 1.68.

Another valuation metric that we should highlight is LH's P/B ratio of 2.32. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.40. Within the past 52 weeks, LH's P/B has been as high as 2.67 and as low as 1.34, with a median of 2.32.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LH has a P/S ratio of 1.54. This compares to its industry's average P/S of 3.33.

Finally, our model also underscores that LH has a P/CF ratio of 11.78. 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. LH's P/CF compares to its industry's average P/CF of 35.19. Over the past 52 weeks, LH's P/CF has been as high as 18.71 and as low as 6.41, with a median of 12.86.

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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