Is Tenet Healthcare (THC) Stock Undervalued Right Now?
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.
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.
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.
One company value investors might notice is Tenet Healthcare (THC). THC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 15.23. This compares to its industry's average Forward P/E of 16.22. THC's Forward P/E has been as high as 18.48 and as low as 8.31, with a median of 14.98, all within the past year.
We also note that THC holds a PEG ratio of 0.83. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. THC's PEG compares to its industry's average PEG of 1.19. Within the past year, THC's PEG has been as high as 5.07 and as low as 0.76, with a median of 1.60.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. THC has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.
Finally, investors should note that THC has a P/CF ratio of 4.50. 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 8.36. THC's P/CF has been as high as 7.24 and as low as 2.61, with a median of 4.30, 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 Tenet Healthcare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, THC feels like a great value stock at the moment.
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Tenet Healthcare Corporation (THC) : Free Stock Analysis Report