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Is Hill-Rom (HRC) Stock Undervalued Right Now?

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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 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 stock to keep an eye on is Hill-Rom (HRC - Free Report) . HRC 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 18.32. This compares to its industry's average Forward P/E of 27.34. Over the past 52 weeks, HRC's Forward P/E has been as high as 20.49 and as low as 12.78, with a median of 18.88.

Investors should also note that HRC holds a PEG ratio of 1.65. 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. HRC's PEG compares to its industry's average PEG of 2.54. HRC's PEG has been as high as 2.05 and as low as 1.15, with a median of 1.70, all within the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HRC has a P/S ratio of 2.41. This compares to its industry's average P/S of 4.95.

Finally, investors should note that HRC has a P/CF ratio of 20.53. 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. HRC's P/CF compares to its industry's average P/CF of 20.54. Within the past 12 months, HRC's P/CF has been as high as 22.45 and as low as 14.38, with a median of 19.14.

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


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