In a market where value is scarce, NYSE:CF offers a refreshing opportunity with its solid fundamentals.

Last update: Mar 14, 2024

Our stock screening tool has pinpointed CF INDUSTRIES HOLDINGS INC (NYSE:CF) as an undervalued stock. NYSE:CF maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

What does the Valuation looks like for NYSE:CF

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:CF has earned a 7 for valuation:

With a Price/Earnings ratio of 10.17, the valuation of CF can be described as very reasonable.
84.71% of the companies in the same industry are more expensive than CF, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CF to the average of the S&P500 Index (26.01), we can say CF is valued rather cheaply.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CF indicates a somewhat cheap valuation: CF is cheaper than 77.65% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.32. CF is valued slightly cheaper when compared to this.
CF's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CF is cheaper than 88.24% of the companies in the same industry.
CF's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CF is cheaper than 91.76% of the companies in the same industry.
CF has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Insights: NYSE:CF

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:CF, the assigned 9 is a significant indicator of profitability:

CF has a Return On Assets of 10.61%. This is amongst the best in the industry. CF outperforms 90.59% of its industry peers.
The Return On Equity of CF (26.67%) is better than 92.94% of its industry peers.
With an excellent Return On Invested Capital value of 13.40%, CF belongs to the best of the industry, outperforming 92.94% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CF is significantly above the industry average of 7.36%.
The 3 year average ROIC (21.67%) for CF is well above the current ROIC(13.40%). The reason for the recent decline needs to be investigated.
Looking at the Profit Margin, with a value of 23.00%, CF belongs to the top of the industry, outperforming 95.29% of the companies in the same industry.
CF's Profit Margin has improved in the last couple of years.
The Operating Margin of CF (34.49%) is better than 94.12% of its industry peers.
CF's Operating Margin has improved in the last couple of years.
CF's Gross Margin of 38.38% is fine compared to the rest of the industry. CF outperforms 78.82% of its industry peers.
CF's Gross Margin has improved in the last couple of years.

Assessing Health for NYSE:CF

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

CF has a Altman-Z score of 2.72. This is in the better half of the industry: CF outperforms 74.12% of its industry peers.
The Debt to FCF ratio of CF is 1.31, which is an excellent value as it means it would take CF, only 1.31 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.31, CF belongs to the top of the industry, outperforming 90.59% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for CF, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
CF has a Current Ratio of 3.81. This indicates that CF is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of CF (3.81) is better than 87.06% of its industry peers.
A Quick Ratio of 3.44 indicates that CF has no problem at all paying its short term obligations.
CF has a Quick ratio of 3.44. This is amongst the best in the industry. CF outperforms 89.41% of its industry peers.

Growth Assessment of NYSE:CF

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:CF has achieved a 4 out of 10:

CF shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 47.09% yearly.
CF shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.41% yearly.

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

For an up to date full fundamental analysis you can check the fundamental report of CF

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.