When you look at NYSE:AGCO, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: May 10, 2024

Our stock screener has spotted AGCO CORP (NYSE:AGCO) as an undervalued stock with solid fundamentals. NYSE:AGCO shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Understanding NYSE:AGCO's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:AGCO was assigned a score of 8 for valuation:

With a Price/Earnings ratio of 7.48, the valuation of AGCO can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of AGCO indicates a rather cheap valuation: AGCO is cheaper than 93.80% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.31. AGCO is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 8.77, which indicates a very decent valuation of AGCO.
Based on the Price/Forward Earnings ratio, AGCO is valued cheaper than 93.80% of the companies in the same industry.
AGCO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.48.
Based on the Enterprise Value to EBITDA ratio, AGCO is valued cheaper than 96.12% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AGCO is valued cheaply inside the industry as 80.62% of the companies are valued more expensively.
AGCO has an outstanding profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:AGCO was assigned a score of 9 for profitability:

AGCO has a Return On Assets of 10.26%. This is amongst the best in the industry. AGCO outperforms 82.17% of its industry peers.
Looking at the Return On Equity, with a value of 25.16%, AGCO belongs to the top of the industry, outperforming 86.82% 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 91.47% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AGCO is significantly above the industry average of 10.68%.
The last Return On Invested Capital (18.87%) for AGCO is above the 3 year average (16.46%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 8.13%, AGCO is in the better half of the industry, outperforming 64.34% of the companies in the same industry.
In the last couple of years the Profit Margin of AGCO has grown nicely.
AGCO has a Operating Margin of 11.91%. This is in the better half of the industry: AGCO outperforms 61.24% of its industry peers.
In the last couple of years the Operating Margin of AGCO has grown nicely.
In the last couple of years the Gross Margin of AGCO has grown nicely.

What does the Health looks like for NYSE:AGCO

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:AGCO has achieved a 6 out of 10:

An Altman-Z score of 3.50 indicates that AGCO is not in any danger for bankruptcy at the moment.
The Debt to FCF ratio of AGCO is 2.38, which is a good value as it means it would take AGCO, 2.38 years of fcf income to pay off all of its debts.
AGCO's Debt to FCF ratio of 2.38 is fine compared to the rest of the industry. AGCO outperforms 76.74% of its industry peers.
A Debt/Equity ratio of 0.30 indicates that AGCO is not too dependend on debt financing.
The Debt to Equity ratio of AGCO (0.30) is better than 65.12% of its industry peers.

Growth Assessment of NYSE:AGCO

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:AGCO has received a 5 out of 10:

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

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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.