Despite its impressive fundamentals, NYSE:TPR remains undervalued.

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

How do we evaluate the Valuation for NYSE:TPR?

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:TPR, the assigned 8 reflects its valuation:

• TPR is valuated reasonably with a Price/Earnings ratio of 8.59.
• Based on the Price/Earnings ratio, TPR is valued cheaply inside the industry as 95.92% of the companies are valued more expensively.
• TPR is valuated cheaply when we compare the Price/Earnings ratio to 25.40, which is the current average of the S&P500 Index.
• A Price/Forward Earnings ratio of 7.67 indicates a rather cheap valuation of TPR.
• TPR's Price/Forward Earnings ratio is rather cheap when compared to the industry. TPR is cheaper than 100.00% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.94. TPR is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TPR indicates a rather cheap valuation: TPR is cheaper than 91.84% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, TPR is valued cheaply inside the industry as 83.67% of the companies are valued more expensively.
• TPR has an outstanding profitability rating, which may justify a higher PE ratio.

A Closer Look at Profitability for NYSE:TPR

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:TPR has earned a 9 out of 10:

• TPR has a better Return On Assets (13.10%) than 87.76% of its industry peers.
• With an excellent Return On Equity value of 38.73%, TPR belongs to the best of the industry, outperforming 95.92% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 16.11%, TPR belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for TPR is above the industry average of 10.85%.
• The 3 year average ROIC (15.58%) for TPR is below the current ROIC(16.11%), indicating increased profibility in the last year.
• Looking at the Profit Margin, with a value of 14.03%, TPR belongs to the top of the industry, outperforming 91.84% of the companies in the same industry.
• In the last couple of years the Profit Margin of TPR has grown nicely.
• With an excellent Operating Margin value of 17.57%, TPR belongs to the best of the industry, outperforming 91.84% of the companies in the same industry.
• TPR's Operating Margin has improved in the last couple of years.
• The Gross Margin of TPR (71.36%) is better than 100.00% of its industry peers.
• TPR's Gross Margin has improved in the last couple of years.

Health Assessment of NYSE:TPR

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. NYSE:TPR has earned a 6 out of 10:

• The Debt to FCF ratio of TPR is 1.59, which is an excellent value as it means it would take TPR, only 1.59 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of TPR (1.59) is better than 69.39% of its industry peers.
• Although TPR 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.
• A Current Ratio of 2.02 indicates that TPR has no problem at all paying its short term obligations.

Growth Examination for NYSE:TPR

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:TPR has achieved a 5 out of 10:

• TPR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.89%, which is quite good.
• The Earnings Per Share has been growing by 8.09% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 9.58% on average over the next years. This is quite good.
• 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 TPR contains the most current fundamental analsysis.

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.