NASDAQ:DOX: good value for what you're paying.

Discover AMDOCS LTD (NASDAQ:DOX), an undervalued stock highlighted by our stock screener. NASDAQ:DOX showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Valuation Examination for NASDAQ:DOX

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:DOX boasts a 7 out of 10:

• DOX's Price/Earnings ratio is rather cheap when compared to the industry. DOX is cheaper than 83.13% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 28.73. DOX is valued rather cheaply when compared to this.
• Based on the Price/Forward Earnings ratio of 10.70, the valuation of DOX can be described as reasonable.
• Based on the Price/Forward Earnings ratio, DOX is valued cheaper than 87.95% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.21. DOX is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DOX indicates a somewhat cheap valuation: DOX is cheaper than 74.70% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, DOX is valued a bit cheaper than 79.52% of the companies in the same industry.
• DOX has an outstanding profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:DOX, the assigned 8 is noteworthy for profitability:

• DOX has a Return On Assets of 8.09%. This is in the better half of the industry: DOX outperforms 78.31% of its industry peers.
• DOX has a Return On Equity of 14.62%. This is in the better half of the industry: DOX outperforms 75.90% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 12.52%, DOX belongs to the top of the industry, outperforming 81.93% of the companies in the same industry.
• The 3 year average ROIC (10.98%) for DOX is below the current ROIC(12.52%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 10.43%, DOX is in the better half of the industry, outperforming 77.11% of the companies in the same industry.
• In the last couple of years the Profit Margin of DOX has grown nicely.
• Looking at the Operating Margin, with a value of 14.92%, DOX belongs to the top of the industry, outperforming 83.13% of the companies in the same industry.
• In the last couple of years the Operating Margin of DOX has grown nicely.

How We Gauge Health for NASDAQ:DOX

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:DOX scores a 8 out of 10:

• DOX has an Altman-Z score of 4.56. This indicates that DOX is financially healthy and has little risk of bankruptcy at the moment.
• DOX's Altman-Z score of 4.56 is fine compared to the rest of the industry. DOX outperforms 73.49% of its industry peers.
• DOX has a debt to FCF ratio of 1.01. This is a very positive value and a sign of high solvency as it would only need 1.01 years to pay back of all of its debts.
• DOX has a Debt to FCF ratio of 1.01. This is in the better half of the industry: DOX outperforms 75.90% of its industry peers.
• DOX has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.
• Looking at the Debt to Equity ratio, with a value of 0.18, DOX is in the better half of the industry, outperforming 67.47% of the companies in the same industry.
• DOX 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 NASDAQ:DOX

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 NASDAQ:DOX, the assigned 4 reflects its growth potential:

• DOX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.50%, which is quite good.
• The Earnings Per Share is expected to grow by 9.84% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of DOX 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.