Despite its impressive fundamentals, NYSE:HMC remains undervalued.

Discover HONDA MOTOR CO LTD-SPONS ADR (NYSE:HMC), an undervalued stock highlighted by our stock screener. NYSE:HMC showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Valuation Analysis for NYSE:HMC

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:HMC has received a 9 out of 10:

• A Price/Earnings ratio of 9.56 indicates a reasonable valuation of HMC.
• 84.21% of the companies in the same industry are more expensive than HMC, based on the Price/Earnings ratio.
• HMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.59.
• Based on the Price/Forward Earnings ratio of 8.63, the valuation of HMC can be described as reasonable.
• 86.84% of the companies in the same industry are more expensive than HMC, based on the Price/Forward Earnings ratio.
• The average S&P500 Price/Forward Earnings ratio is at 18.75. HMC is valued rather cheaply when compared to this.
• 89.47% of the companies in the same industry are more expensive than HMC, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, HMC is valued cheaper than 97.37% of the companies in the same industry.
• HMC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of HMC may justify a higher PE ratio.
• A more expensive valuation may be justified as HMC's earnings are expected to grow with 15.63% in the coming years.

Assessing Profitability for NYSE:HMC

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:HMC has earned a 6 out of 10:

• The Return On Assets of HMC (3.27%) is better than 76.32% of its industry peers.
• With a decent Return On Equity value of 7.21%, HMC is doing good in the industry, outperforming 73.68% of the companies in the same industry.
• HMC's Return On Invested Capital of 3.73% is fine compared to the rest of the industry. HMC outperforms 76.32% of its industry peers.
• The 3 year average ROIC (3.16%) for HMC is below the current ROIC(3.73%), indicating increased profibility in the last year.
• HMC's Profit Margin of 4.89% is amongst the best of the industry. HMC outperforms 81.58% of its industry peers.
• HMC has a Operating Margin of 5.38%. This is in the better half of the industry: HMC outperforms 78.95% of its industry peers.
• HMC has a better Gross Margin (20.13%) than 84.21% of its industry peers.

Health Analysis for NYSE:HMC

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. NYSE:HMC scores a 6 out of 10:

• HMC has a Altman-Z score of 1.82. This is in the better half of the industry: HMC outperforms 71.05% of its industry peers.
• The Debt to FCF ratio of HMC (7.69) is better than 84.21% of its industry peers.
• A Debt/Equity ratio of 0.41 indicates that HMC is not too dependend on debt financing.

Growth Analysis for NYSE:HMC

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:HMC has achieved a 5 out of 10:

• HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.62%, which is quite impressive.
• Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 19.63% in the last year.
• The Earnings Per Share is expected to grow by 15.63% 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.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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

Keep in mind

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.