Back to top

Are Investors Undervaluing Lenovo (LNVGY) Right Now?

Read MoreHide Full Article

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.

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 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 value investors might notice is Lenovo (LNVGY - Free Report) . LNVGY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.21. This compares to its industry's average Forward P/E of 15.16. Over the last 12 months, LNVGY's Forward P/E has been as high as 20.46 and as low as 8.90, with a median of 14.40.

LNVGY is also sporting a PEG ratio of 1.66. 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. LNVGY's PEG compares to its industry's average PEG of 1.73. Over the last 12 months, LNVGY's PEG has been as high as 1.88 and as low as 1.47, with a median of 1.64.

Finally, investors will want to recognize that LNVGY has a P/CF ratio of 6.62. 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. This stock's P/CF looks attractive against its industry's average P/CF of 11.22. LNVGY's P/CF has been as high as 12.11 and as low as 6.06, with a median of 8.18, all within the past year.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Lenovo Group Ltd. (LNVGY) - free report >>

Published in