Should you buy shares of AstraZeneca plc (AZN) on Thursday?
Investors Observer gives AstraZeneca plc (AZN) a strong valuation score of 83 based on its analysis. The proprietary rating system takes into account the underlying health of a company by analyzing its stock price, earnings and rate of growth. AZN currently holds better value than 83% of the shares based on these metrics. Long-term buy and hold investors should find the most relevant valuation ranking system when making investment decisions.
AZN’s 12-month price-to-earnings (PE) ratio of 39.7 puts it above the all-time average of around 15. AZN is poor value at its current trading price as investors pay more than what it is worth in relation to the company’s profits. . AZN’s 12-month earnings per share (EPS) of 0.95 does not justify what it is currently trading in the market. Tracking PE ratios, however, do not take into account a company’s projected growth rate, resulting in some companies having high PE ratios due to high growth potentially attractive to investors even though current earnings are weak.
AZN currently has a 12-month forward PEG to growth ratio of 1.31. The market is currently overvaluing AZN relative to its projected growth due to the PEG ratio above fair market value of 1. AZN’s PEG arises from the fact that its forward price / earnings ratio is divided by its growth rate. Because PEG ratios include more of a company’s overall health fundamentals with an additional focus on the future, they are one of the valuation metrics most used by analysts.
Click here for the full stock valuation report of AstraZeneca plc (AZN).