Medtronic PLC (MDT) receives a weak valuation ranking of 39 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. MDT has a better value than 39% 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.
Metrics Analysis
MDT has a trailing twelve month Price to Earnings (PE) ratio of 33 which places it above the histroical average of roughly 15. MDT is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. MDT's trailing-12-month earnings per share (EPS) of 3.26 does not 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.
MDT has a 12 month forward PE to Growth (PEG) ratio of 3.49. Markets are undervaluing MDT in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 3.25999999'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
MDT's valuation metrics are weak at its current price due to a overvalued PEG ratio due to strong growth. MDT's PE and PEG are worse than the market average resulting in a below average valuation score.
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