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Is Leidos (LDOS) Stock Undervalued 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Leidos (LDOS - Free Report) . LDOS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 14.80, while its industry has an average P/E of 20.36. LDOS's Forward P/E has been as high as 20.34 and as low as 13.88, with a median of 16.45, all within the past year.

Investors should also note that LDOS holds a PEG ratio of 1. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LDOS's industry currently sports an average PEG of 1.45. LDOS's PEG has been as high as 2.06 and as low as 0.94, with a median of 1.52, all within the past year.

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. LDOS has a P/S ratio of 1.25. This compares to its industry's average P/S of 1.74.

Finally, our model also underscores that LDOS has a P/CF ratio of 13.93. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. LDOS's current P/CF looks attractive when compared to its industry's average P/CF of 27.68. Within the past 12 months, LDOS's P/CF has been as high as 18.38 and as low as 13.07, with a median of 15.27.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Leidos is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, LDOS feels like a great value stock at the moment.


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