Despite its impressive fundamentals, NYSE:TS remains undervalued.

Last update: Sep 28, 2023

Consider TENARIS SA-ADR (NYSE:TS) as a top value stock, identified by our stock screening tool. NYSE:TS shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Unpacking NYSE:TS's Valuation Rating

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:TS has earned a 9 for valuation:

TS is valuated cheaply with a Price/Earnings ratio of 3.93.
Based on the Price/Earnings ratio, TS is valued cheaply inside the industry as 98.44% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TS to the average of the S&P500 Index (25.59), we can say TS is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 6.55, the valuation of TS can be described as very cheap.
Based on the Price/Forward Earnings ratio, TS is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 18.75, TS is valued rather cheaply.
98.44% of the companies in the same industry are more expensive than TS, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TS indicates a rather cheap valuation: TS is cheaper than 90.63% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of TS may justify a higher PE ratio.

Assessing Profitability for NYSE:TS

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:TS was assigned a score of 8 for profitability:

TS has a Return On Assets of 19.03%. This is amongst the best in the industry. TS outperforms 96.88% of its industry peers.
TS has a better Return On Equity (23.46%) than 85.94% of its industry peers.
The Return On Invested Capital of TS (22.43%) is better than 96.88% of its industry peers.
TS has a Profit Margin of 24.75%. This is amongst the best in the industry. TS outperforms 98.44% of its industry peers.
In the last couple of years the Profit Margin of TS has grown nicely.
TS's Operating Margin of 30.53% is amongst the best of the industry. TS outperforms 96.88% of its industry peers.
TS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 43.25%, TS belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
In the last couple of years the Gross Margin of TS has grown nicely.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:TS, the assigned 9 reflects its health status:

An Altman-Z score of 6.17 indicates that TS is not in any danger for bankruptcy at the moment.
TS has a Altman-Z score of 6.17. This is amongst the best in the industry. TS outperforms 92.19% of its industry peers.
The Debt to FCF ratio of TS is 0.32, which is an excellent value as it means it would take TS, only 0.32 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of TS (0.32) is better than 96.88% of its industry peers.
TS has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
TS has a better Debt to Equity ratio (0.01) than 92.19% of its industry peers.
A Current Ratio of 3.71 indicates that TS has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.71, TS belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
TS has a Quick Ratio of 2.21. This indicates that TS is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of TS (2.21) is better than 84.38% of its industry peers.

Growth Assessment of NYSE:TS

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:TS has achieved a 5 out of 10:

The Earnings Per Share has grown by an impressive 159.62% over the past year.
The Earnings Per Share has been growing by 41.56% on average over the past years. This is a very strong growth
TS shows a strong growth in Revenue. In the last year, the Revenue has grown by 64.96%.
Measured over the past years, TS shows a quite strong growth in Revenue. The Revenue has been growing by 17.34% on average per year.

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

Our latest full fundamental report of TS 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.