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

Last update: May 21, 2024

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

Assessing Valuation Metrics for NYSE:LEA

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:LEA boasts a 8 out of 10:

With a Price/Earnings ratio of 10.39, the valuation of LEA can be described as very reasonable.
Based on the Price/Earnings ratio, LEA is valued cheaply inside the industry as 90.48% of the companies are valued more expensively.
LEA is valuated cheaply when we compare the Price/Earnings ratio to 28.67, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 7.17, the valuation of LEA can be described as very cheap.
Based on the Price/Forward Earnings ratio, LEA is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, LEA is valued rather cheaply.
76.19% of the companies in the same industry are more expensive than LEA, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, LEA is valued a bit cheaper than the industry average as 73.81% of the companies are valued more expensively.
LEA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LEA's earnings are expected to grow with 20.64% in the coming years.

Assessing Profitability for NYSE:LEA

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:LEA, the assigned 5 is a significant indicator of profitability:

LEA has a Return On Assets of 3.62%. This is in the better half of the industry: LEA outperforms 69.05% of its industry peers.
LEA's Return On Equity of 11.01% is fine compared to the rest of the industry. LEA outperforms 76.19% of its industry peers.
The Return On Invested Capital of LEA (9.06%) is better than 76.19% of its industry peers.
The 3 year average ROIC (7.93%) for LEA is below the current ROIC(9.06%), indicating increased profibility in the last year.

Assessing Health Metrics for NYSE:LEA

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:LEA was assigned a score of 5 for health:

With a decent Altman-Z score value of 2.96, LEA is doing good in the industry, outperforming 69.05% of the companies in the same industry.
Looking at the Debt to FCF ratio, with a value of 4.45, LEA is in the better half of the industry, outperforming 66.67% of the companies in the same industry.

Looking at the Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:LEA has earned a 5 for growth:

LEA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.81%, which is quite impressive.
Looking at the last year, LEA shows a quite strong growth in Revenue. The Revenue has grown by 9.70% in the last year.
LEA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.85% yearly.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

Check the latest full fundamental report of LEA for a complete fundamental analysis.

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.