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Are Investors Undervaluing Dell Technologies (DELL) Right Now?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Dell Technologies (DELL). DELL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 6.96 right now. For comparison, its industry sports an average P/E of 18.78. Over the past year, DELL's Forward P/E has been as high as 10.63 and as low as 6.16, with a median of 7.81.

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We should also highlight that DELL has a P/B ratio of 11.78. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DELL's current P/B looks attractive when compared to its industry's average P/B of 14.85. Over the past year, DELL's P/B has been as high as 13.51 and as low as -54.65, with a median of 2.29.

These are only a few of the key metrics included in Dell Technologies's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DELL looks like an impressive value stock at the moment.


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Zacks Investment Research