For those who appreciate value investing, NYSE:TEX is a compelling option with its solid fundamentals.

Last update: Dec 25, 2023

TEREX CORP (NYSE:TEX) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NYSE:TEX showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Deciphering NYSE:TEX's Valuation Rating

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. NYSE:TEX was assigned a score of 9 for valuation:

TEX is valuated reasonably with a Price/Earnings ratio of 8.18.
95.45% of the companies in the same industry are more expensive than TEX, based on the Price/Earnings ratio.
TEX is valuated cheaply when we compare the Price/Earnings ratio to 25.95, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 8.01, the valuation of TEX can be described as very reasonable.
94.70% of the companies in the same industry are more expensive than TEX, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.89, TEX is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TEX indicates a rather cheap valuation: TEX is cheaper than 88.64% of the companies listed in the same industry.
TEX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TEX is cheaper than 84.09% of the companies in the same industry.
TEX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TEX has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TEX's earnings are expected to grow with 16.86% in the coming years.

Analyzing Profitability Metrics

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:TEX, the assigned 7 is a significant indicator of profitability:

TEX's Return On Assets of 13.97% is amongst the best of the industry. TEX outperforms 93.94% of its industry peers.
TEX's Return On Equity of 32.31% is amongst the best of the industry. TEX outperforms 92.42% of its industry peers.
The Return On Invested Capital of TEX (21.98%) is better than 94.70% of its industry peers.
The 3 year average ROIC (11.01%) for TEX is below the current ROIC(21.98%), indicating increased profibility in the last year.
TEX's Profit Margin of 9.39% is fine compared to the rest of the industry. TEX outperforms 73.48% of its industry peers.
TEX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 12.47%, TEX is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
In the last couple of years the Operating Margin of TEX has grown nicely.

How We Gauge Health for NYSE:TEX

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:TEX, the assigned 7 for health provides valuable insights:

TEX has an Altman-Z score of 4.33. This indicates that TEX is financially healthy and has little risk of bankruptcy at the moment.
TEX's Altman-Z score of 4.33 is fine compared to the rest of the industry. TEX outperforms 75.76% of its industry peers.
TEX has a debt to FCF ratio of 2.19. This is a good value and a sign of high solvency as TEX would need 2.19 years to pay back of all of its debts.
TEX has a better Debt to FCF ratio (2.19) than 78.03% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that TEX is not too dependend on debt financing.
TEX has a Current Ratio of 2.11. This indicates that TEX is financially healthy and has no problem in meeting its short term obligations.

Growth Assessment of NYSE:TEX

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:TEX scores a 6 out of 10:

TEX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 84.60%, which is quite impressive.
Measured over the past years, TEX shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.63% on average per year.
The Revenue has grown by 22.82% in the past year. This is a very strong growth!
TEX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.98% yearly.
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.

Our latest full fundamental report of TEX 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.