Is Sodexo (SDXAY) Stock Undervalued Right Now?

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, 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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Sodexo (SDXAY). SDXAY is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 10.47 right now. For comparison, its industry sports an average P/E of 25.88. SDXAY's Forward P/E has been as high as 16.24 and as low as 9.71, with a median of 12.54, all within the past year.

Investors should also recognize that SDXAY has a P/B ratio of 2.21. The P/B ratio is used to compare a stock's market value with 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 4.83. Over the past 12 months, SDXAY's P/B has been as high as 3.22 and as low as 2.04, with a median of 2.68.

These are just a handful of the figures considered in Sodexo'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 SDXAY is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com