Back to top

Image: Bigstock

Are Investors Undervaluing Intel (INTC) Right Now?

Read MoreHide Full Article

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

Intel (INTC - Free Report) is a stock many investors are watching right now. INTC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.23 right now. For comparison, its industry sports an average P/E of 17.76. INTC's Forward P/E has been as high as 12.86 and as low as 9.55, with a median of 11.40, all within the past year.

Investors will also notice that INTC has a PEG ratio of 1.63. 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. INTC's industry currently sports an average PEG of 2.28. Over the last 12 months, INTC's PEG has been as high as 1.68 and as low as 1.13, with a median of 1.43.

Another valuation metric that we should highlight is INTC's P/B ratio of 3.38. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 4.77. Within the past 52 weeks, INTC's P/B has been as high as 3.58 and as low as 2.64, with a median of 3.01.

Finally, investors will want to recognize that INTC has a P/CF ratio of 8.62. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.93. Over the past 52 weeks, INTC's P/CF has been as high as 9.39 and as low as 6.59, with a median of 7.74.

These are just a handful of the figures considered in Intel's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that INTC is an impressive value stock right now.


See More Zacks Research for These Tickers


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


Intel Corporation (INTC) - free report >>

Published in