NYSE:AGCO, an undervalued stock with good fundamentals.

Last update: Mar 19, 2024

Take a closer look at AGCO CORP (NYSE:AGCO), a remarkable value stock uncovered by our stock screener. NYSE:AGCO excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

Unpacking NYSE:AGCO's Valuation Rating

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:AGCO scores a 8 out of 10:

A Price/Earnings ratio of 7.42 indicates a rather cheap valuation of AGCO.
Compared to the rest of the industry, the Price/Earnings ratio of AGCO indicates a rather cheap valuation: AGCO is cheaper than 96.18% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 25.68. AGCO is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.66, the valuation of AGCO can be described as reasonable.
Based on the Price/Forward Earnings ratio, AGCO is valued cheaper than 92.37% of the companies in the same industry.
AGCO is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.14, which is the current average of the S&P500 Index.
AGCO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AGCO is cheaper than 96.95% of the companies in the same industry.
81.68% of the companies in the same industry are more expensive than AGCO, based on the Price/Free Cash Flow ratio.
The excellent profitability rating of AGCO may justify a higher PE ratio.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:AGCO has earned a 9 out of 10:

AGCO has a better Return On Assets (10.26%) than 82.44% of its industry peers.
With an excellent Return On Equity value of 25.16%, AGCO belongs to the best of the industry, outperforming 87.02% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.87%, AGCO belongs to the top of the industry, outperforming 91.60% of the companies in the same industry.
AGCO had an Average Return On Invested Capital over the past 3 years of 16.46%. This is significantly above the industry average of 10.64%.
The 3 year average ROIC (16.46%) for AGCO is below the current ROIC(18.87%), indicating increased profibility in the last year.
AGCO's Profit Margin of 8.13% is fine compared to the rest of the industry. AGCO outperforms 64.89% of its industry peers.
AGCO's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 11.91%, AGCO is doing good in the industry, outperforming 62.60% of the companies in the same industry.
AGCO's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of AGCO has grown nicely.

Health Assessment of NYSE:AGCO

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:AGCO was assigned a score of 7 for health:

An Altman-Z score of 3.51 indicates that AGCO is not in any danger for bankruptcy at the moment.
AGCO's Altman-Z score of 3.51 is fine compared to the rest of the industry. AGCO outperforms 63.36% of its industry peers.
AGCO has a debt to FCF ratio of 2.38. This is a good value and a sign of high solvency as AGCO would need 2.38 years to pay back of all of its debts.
AGCO's Debt to FCF ratio of 2.38 is fine compared to the rest of the industry. AGCO outperforms 76.34% of its industry peers.
A Debt/Equity ratio of 0.30 indicates that AGCO is not too dependend on debt financing.
AGCO has a better Debt to Equity ratio (0.30) than 61.07% of its industry peers.
AGCO does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How We Gauge Growth for NYSE:AGCO

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:AGCO, the assigned 5 reflects its growth potential:

AGCO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.30%, which is quite impressive.
AGCO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.93% yearly.
AGCO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.92%.
The Revenue has been growing by 9.04% on average over the past years. This is quite good.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of AGCO contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.