InvestorsObserver gives Sensata Technologies Holding PLC (ST) a strong valuation score of 71 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. ST currently holds a better value than 71% 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.
Metrics Analysis
ST's trailing-12-month Price to Earnings (PE) ratio of 45.2 puts it above the historical average of roughly 15. ST is a poor value at its current trading price as investors are paying more than what its worth in relation to the company's earnings. ST's trailing-12-month earnings per share (EPS) of 1.33 does not justify what it is currently trading at in the market. Trailing PE ratios, however, do not factor in a company's projected growth rate, resulting in some firms having high PE ratios due to high growth potentially enticing investors even if current earnings are low.
ST has a 12 month forward PE to Growth (PEG) ratio of 1.59. Markets are undervaluing ST in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 1.33000004'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 ST at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for ST are worse than the average of the market resulting in a valuation score of 71.
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