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Is Genpact Ltd (G) Stock Over or Undervalued?

Tuesday, September 20, 2022 02:29 PM | InvestorsObserver Analysts
Is Genpact Ltd (G) Stock Over or Undervalued?

InvestorsObserver gives Genpact Ltd (G) a strong valuation score of 70 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. G currently holds a better value than 70% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 70
G gets a 70 Valuation Rank today. Find out what this means to you and get the rest of the rankings on G!

Metrics Analysis

G has a trailing twelve month Price to Earnings (PE) ratio of 25.6. The historical average of roughly 15 shows a poor value for G stock as investors are paying higher share prices relative to the company's earnings. G's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 1.79 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
G currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.55. The market is currently overvaluing G in relation to its projected growth due to the PEG ratio being above the fair market value of 1. G's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for G at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for G are worse than the average of the market resulting in a valuation score of 70. Click Here to get the full Report on Genpact Ltd (G) stock.

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