NASDAQ:TRMD stands out as a stock that provides good value for the fundamentals it showcases.

Last update: Feb 23, 2024

Discover TORM PLC-A (NASDAQ:TRMD)—an undervalued stock our stock screener has picked out. NASDAQ:TRMD demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

How We Gauge Valuation for NASDAQ:TRMD

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 NASDAQ:TRMD, the assigned 8 reflects its valuation:

A Price/Earnings ratio of 4.15 indicates a rather cheap valuation of TRMD.
Compared to the rest of the industry, the Price/Earnings ratio of TRMD indicates a rather cheap valuation: TRMD is cheaper than 84.65% of the companies listed in the same industry.
TRMD is valuated cheaply when we compare the Price/Earnings ratio to 26.32, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 5.17 indicates a rather cheap valuation of TRMD.
Based on the Price/Forward Earnings ratio, TRMD is valued cheaper than 88.37% of the companies in the same industry.
TRMD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.63.
Based on the Enterprise Value to EBITDA ratio, TRMD is valued a bit cheaper than 65.58% of the companies in the same industry.
77.67% of the companies in the same industry are more expensive than TRMD, based on the Price/Free Cash Flow ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TRMD has an outstanding profitability rating, which may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:TRMD, the assigned 8 is noteworthy for profitability:

With an excellent Return On Assets value of 24.66%, TRMD belongs to the best of the industry, outperforming 85.12% of the companies in the same industry.
With an excellent Return On Equity value of 44.18%, TRMD belongs to the best of the industry, outperforming 84.65% of the companies in the same industry.
TRMD has a Return On Invested Capital of 22.72%. This is amongst the best in the industry. TRMD outperforms 85.12% of its industry peers.
The last Return On Invested Capital (22.72%) for TRMD is above the 3 year average (8.75%), which is a sign of increasing profitability.
TRMD has a better Profit Margin (43.82%) than 84.19% of its industry peers.
TRMD's Profit Margin has improved in the last couple of years.
The Operating Margin of TRMD (45.84%) is better than 80.00% of its industry peers.
TRMD's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 73.18%, TRMD is in the better half of the industry, outperforming 77.67% of the companies in the same industry.
TRMD's Gross Margin has improved in the last couple of years.

Understanding NASDAQ:TRMD's Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:TRMD has earned a 8 out of 10:

TRMD has an Altman-Z score of 3.81. This indicates that TRMD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.81, TRMD belongs to the top of the industry, outperforming 81.86% of the companies in the same industry.
TRMD has a debt to FCF ratio of 2.24. This is a good value and a sign of high solvency as TRMD would need 2.24 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.24, TRMD is doing good in the industry, outperforming 69.30% of the companies in the same industry.
Although TRMD 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 2.33 indicates that TRMD has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.33, TRMD is in the better half of the industry, outperforming 78.60% of the companies in the same industry.
TRMD has a Quick Ratio of 2.09. This indicates that TRMD is financially healthy and has no problem in meeting its short term obligations.
TRMD's Quick ratio of 2.09 is fine compared to the rest of the industry. TRMD outperforms 78.60% of its industry peers.

Looking at the Growth

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. NASDAQ:TRMD has received a 6 out of 10:

The Earnings Per Share has grown by an impressive 104.29% over the past year.
The Earnings Per Share has been growing by 157.48% on average over the past years. This is a very strong growth
TRMD shows a strong growth in Revenue. In the last year, the Revenue has grown by 33.31%.
Measured over the past years, TRMD shows a quite strong growth in Revenue. The Revenue has been growing by 17.05% on average per year.
TRMD is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.93% yearly.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

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