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

Last update: Apr 5, 2024

Our stock screening tool has identified TRAVEL + LEISURE CO (NYSE:TNL) as an undervalued gem with strong fundamentals. NYSE:TNL boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Analyzing Valuation Metrics

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:TNL has earned a 7 for valuation:

The Price/Earnings ratio is 8.07, which indicates a very decent valuation of TNL.
TNL's Price/Earnings ratio is rather cheap when compared to the industry. TNL is cheaper than 94.03% of the companies in the same industry.
TNL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.77.
TNL is valuated reasonably with a Price/Forward Earnings ratio of 8.46.
TNL's Price/Forward Earnings ratio is rather cheap when compared to the industry. TNL is cheaper than 98.51% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of TNL to the average of the S&P500 Index (22.16), we can say TNL is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, TNL is valued a bit cheaper than the industry average as 61.94% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TNL is valued cheaper than 86.57% of the companies in the same industry.
TNL has a very decent profitability rating, which may justify a higher PE ratio.

A Closer Look at Profitability for NYSE:TNL

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, NYSE:TNL has achieved a 6:

TNL's Return On Assets of 5.89% is fine compared to the rest of the industry. TNL outperforms 72.39% of its industry peers.
TNL has a better Return On Invested Capital (10.46%) than 73.13% of its industry peers.
The last Return On Invested Capital (10.46%) for TNL is above the 3 year average (9.59%), which is a sign of increasing profitability.
TNL's Profit Margin of 10.59% is fine compared to the rest of the industry. TNL outperforms 73.88% of its industry peers.
The Operating Margin of TNL (19.95%) is better than 79.85% of its industry peers.

Analyzing Health Metrics

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:TNL scores a 6 out of 10:

TNL has a Altman-Z score of 2.20. This is in the better half of the industry: TNL outperforms 61.19% of its industry peers.
A Current Ratio of 3.67 indicates that TNL has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.67, TNL belongs to the best of the industry, outperforming 97.76% of the companies in the same industry.
TNL has a Quick Ratio of 2.75. This indicates that TNL is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.75, TNL belongs to the top of the industry, outperforming 94.03% of the companies in the same industry.

Unpacking NYSE:TNL's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:TNL has received a 4 out of 10:

The Earnings Per Share has grown by an impressive 26.43% over the past year.
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.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of TNL

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.