NYSE:HMC is an undervalued gem with solid fundamentals.

Last update: May 2, 2024

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.

How We Gauge Valuation for NYSE:HMC

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. NYSE:HMC boasts a 9 out of 10:

The Price/Earnings ratio is 8.81, which indicates a very decent valuation of HMC.
HMC's Price/Earnings ratio is rather cheap when compared to the industry. HMC is cheaper than 87.18% of the companies in the same industry.
HMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.55.
A Price/Forward Earnings ratio of 7.97 indicates a rather cheap valuation of HMC.
92.31% 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 20.92. HMC is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, HMC is valued cheaply inside the industry as 94.87% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HMC indicates a rather cheap valuation: HMC is cheaper than 82.05% of the companies listed 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.
HMC has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HMC's earnings are expected to grow with 19.12% in the coming years.

Analyzing Profitability Metrics

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:

With a decent Return On Assets value of 3.42%, HMC is doing good in the industry, outperforming 71.79% of the companies in the same industry.
The Return On Equity of HMC (7.78%) is better than 71.79% of its industry peers.
With a decent Return On Invested Capital value of 4.28%, HMC is doing good in the industry, outperforming 71.79% of the companies in the same industry.
The last Return On Invested Capital (4.28%) for HMC is above the 3 year average (3.16%), which is a sign of increasing profitability.
HMC's Profit Margin of 4.84% is fine compared to the rest of the industry. HMC outperforms 76.92% of its industry peers.
The Operating Margin of HMC (5.79%) is better than 74.36% of its industry peers.
With a decent Gross Margin value of 21.23%, HMC is doing good in the industry, outperforming 79.49% of the companies in the same industry.

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 5 out of 10:

HMC's Altman-Z score of 1.86 is fine compared to the rest of the industry. HMC outperforms 64.10% of its industry peers.
The Debt to FCF ratio of HMC (28.64) is better than 79.49% of its industry peers.
HMC has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.

A Closer Look at Growth 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 6 out of 10:

HMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 43.86%, which is quite impressive.
Looking at the last year, HMC shows a quite strong growth in Revenue. The Revenue has grown by 18.20% in the last year.
Based on estimates for the next years, HMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.12% on average per year.
HMC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.04% yearly.
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.

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

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

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.