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

Last update: Feb 6, 2024

TEREX CORP (NYSE:TEX) was identified as a decent value stock by our stock screener. NYSE:TEX scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

How We Gauge Valuation for NYSE:TEX

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:TEX has achieved a 9 out of 10:

With a Price/Earnings ratio of 8.90, the valuation of TEX can be described as very reasonable.
Based on the Price/Earnings ratio, TEX is valued cheaply inside the industry as 93.13% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.62. TEX is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 8.81, which indicates a very decent valuation of TEX.
94.66% of the companies in the same industry are more expensive than TEX, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.25. TEX is valued rather cheaply when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TEX indicates a rather cheap valuation: TEX is cheaper than 87.02% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TEX is valued cheaper than 82.44% 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.
The decent profitability rating of TEX may justify a higher PE ratio.
TEX's earnings are expected to grow with 16.35% in the coming years. This may justify a more expensive valuation.

Looking at the Profitability

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:TEX has earned a 7 out of 10:

TEX's Return On Assets of 13.97% is amongst the best of the industry. TEX outperforms 94.66% of its industry peers.
TEX's Return On Equity of 32.31% is amongst the best of the industry. TEX outperforms 92.37% of its industry peers.
TEX's Return On Invested Capital of 21.98% is amongst the best of the industry. TEX outperforms 94.66% 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.
Looking at the Profit Margin, with a value of 9.39%, TEX is in the better half of the industry, outperforming 72.52% of the companies in the same industry.
In the last couple of years the Profit Margin of TEX has grown nicely.
The Operating Margin of TEX (12.47%) is better than 67.94% of its industry peers.
In the last couple of years the Operating Margin of TEX has grown nicely.

Health Assessment of NYSE:TEX

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:TEX scores a 6 out of 10:

TEX has an Altman-Z score of 4.43. This indicates that TEX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.43, TEX is in the better half of the industry, outperforming 75.57% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 2.19, TEX is in the better half of the industry, outperforming 77.86% of the companies in the same industry.
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.

Deciphering NYSE:TEX's Growth Rating

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:TEX was assigned a score of 6 for growth:

The Earnings Per Share has grown by an impressive 84.60% over the past year.
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.
Looking at the last year, TEX shows a very strong growth in Revenue. The Revenue has grown by 22.82%.
Based on estimates for the next years, TEX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.98% on average per year.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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

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

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.