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Are Investors Undervaluing Taylor Morrison Home (TMHC) Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Taylor Morrison Home (TMHC - Free Report) . TMHC is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 6.63, which compares to its industry's average of 10.88. Over the past 52 weeks, TMHC's Forward P/E has been as high as 10.25 and as low as 2.22, with a median of 7.89.

TMHC is also sporting a PEG ratio of 1.28. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TMHC's PEG compares to its industry's average PEG of 2.16. Over the past 52 weeks, TMHC's PEG has been as high as 1.39 and as low as 1.28, with a median of 1.36.

Investors should also recognize that TMHC has a P/B ratio of 0.92. The P/B ratio is used to compare a stock's market value with 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 1.27. Over the past 12 months, TMHC's P/B has been as high as 1.18 and as low as 0.29, with a median of 0.91.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. TMHC has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.78.

Value investors will likely look at more than just these metrics, but the above data helps show that Taylor Morrison Home is likely undervalued currently. And when considering the strength of its earnings outlook, TMHC sticks out at as one of the market's strongest value stocks.


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