When you look at NASDAQ:PPC, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Our stock screening tool has pinpointed PILGRIM'S PRIDE CORP (NASDAQ:PPC) as an undervalued stock option. NASDAQ:PPC retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Valuation Assessment of NASDAQ:PPC

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:PPC was assigned a score of 9 for valuation:

• A Price/Earnings ratio of 10.20 indicates a reasonable valuation of PPC.
• Based on the Price/Earnings ratio, PPC is valued cheaper than 87.78% of the companies in the same industry.
• PPC is valuated cheaply when we compare the Price/Earnings ratio to 27.43, which is the current average of the S&P500 Index.
• PPC is valuated reasonably with a Price/Forward Earnings ratio of 10.86.
• Based on the Price/Forward Earnings ratio, PPC is valued cheaper than 90.00% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of PPC to the average of the S&P500 Index (22.57), we can say PPC is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, PPC is valued cheaply inside the industry as 82.22% of the companies are valued more expensively.
• PPC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PPC is cheaper than 85.56% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• PPC has a very decent profitability rating, which may justify a higher PE ratio.
• PPC's earnings are expected to grow with 34.71% in the coming years. This may justify a more expensive valuation.

Profitability Analysis for NASDAQ:PPC

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:PPC has achieved a 6:

• Looking at the Return On Assets, with a value of 9.21%, PPC belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 23.43%, PPC belongs to the top of the industry, outperforming 94.44% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 14.60%, PPC belongs to the best of the industry, outperforming 93.33% of the companies in the same industry.
• The 3 year average ROIC (7.82%) for PPC is below the current ROIC(14.60%), indicating increased profibility in the last year.
• PPC has a Profit Margin of 5.46%. This is in the better half of the industry: PPC outperforms 71.11% of its industry peers.
• PPC has a Operating Margin of 8.16%. This is in the better half of the industry: PPC outperforms 70.00% of its industry peers.

Deciphering NASDAQ:PPC's Health Rating

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. NASDAQ:PPC has earned a 7 out of 10:

• PPC has an Altman-Z score of 3.84. This indicates that PPC is financially healthy and has little risk of bankruptcy at the moment.
• PPC's Altman-Z score of 3.84 is fine compared to the rest of the industry. PPC outperforms 77.78% of its industry peers.
• The Debt to FCF ratio of PPC is 2.14, which is a good value as it means it would take PPC, 2.14 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 2.14, PPC is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
• Although PPC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• The Quick ratio of PPC (1.27) is better than 71.11% of its industry peers.

Assessing Growth Metrics for NASDAQ:PPC

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. NASDAQ:PPC has earned a 5 for growth:

• PPC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 663.93%, which is quite impressive.
• The Revenue has been growing by 9.68% on average over the past years. This is quite good.
• Based on estimates for the next years, PPC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.07% on average per year.
• 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.

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

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

Keep in mind

This article should in no way be interpreted as advice. 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.