Ultrapar Participacoes SA (UGP) receives a strong valuation ranking of 67 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. UGP has a better value than 67% 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
UGP has a trailing twelve month Price to Earnings (PE) ratio of 180.6. The historical average of roughly 15 shows a poor value for UGP stock as investors are paying higher share prices relative to the company's earnings. UGP'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 0.15 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.
UGP's 12-month-forward PE to Growth (PEG) ratio of 0.57 is considered a good value as the market is undervaluing UGP in relation to the company's projected earnings growth. UGP's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
Summary
All together these valuation metrics paint a pretty strong picture for UGP at its current price due to a undervalued PEG ratio despite strong growth. The PE and PEG for UGP are better than the average of the market resulting in a valuation score of 67.
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