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Is Kroger Co (KR) Stock Trading Below Fair Value?

Friday, February 23, 2024 03:33 PM | InvestorsObserver Analysts

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Is Kroger Co (KR) Stock Trading Below Fair Value?

Kroger Co (KR) receives a weak valuation ranking of 37 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. KR has a better value than 37% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 37
KR gets a 37 Valuation Rank today. Find out what this means to you and get the rest of the rankings on KR!

Metrics Analysis

KR has a trailing twelve month Price to Earnings (PE) ratio of 17.68 which places it around the histroical average of roughly 15. KR is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. KR's trailing-12-month earnings per share (EPS) of 2.57 does justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
KR has a 12 month forward PE to Growth (PEG) ratio of 2.5. Markets are overvaluing KR in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 2.57's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

All together these valuation metrics paint a pretty poor picture for KR at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for KR are worse than the average of the market resulting in a valuation score of 37. Click Here to get the full Report on Kroger Co (KR) stock.

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