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Should Value Investors Buy Tempur Sealy (TPX) Stock?

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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 the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Tempur Sealy (TPX - Free Report) is a stock many investors are watching right now. TPX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 13.02. This compares to its industry's average Forward P/E of 18.41. TPX's Forward P/E has been as high as 24.29 and as low as 11.82, with a median of 14.22, all within the past year.

Investors should also note that TPX holds a PEG ratio of 0.69. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TPX's industry has an average PEG of 0.86 right now. Within the past year, TPX's PEG has been as high as 1.89 and as low as 0.37, with a median of 0.78.

Finally, investors will want to recognize that TPX has a P/CF ratio of 12.10. 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. This stock's P/CF looks attractive against its industry's average P/CF of 20.92. TPX's P/CF has been as high as 15.24 and as low as 9.51, with a median of 12.19, all within the past year.

These are only a few of the key metrics included in Tempur Sealy'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, TPX looks like an impressive value stock at the moment.


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