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Is Telephone & Data Systems (TDS) Stock Undervalued Right Now?

Zacks Equity Research
·2 min read

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Telephone & Data Systems (TDS) is a stock many investors are watching right now. TDS is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 19.39 right now. For comparison, its industry sports an average P/E of 19.58. Over the past year, TDS's Forward P/E has been as high as 29.25 and as low as 13.61, with a median of 23.12.

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Finally, we should also recognize that TDS has a P/CF ratio of 2.05. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 2.07. Over the past 52 weeks, TDS's P/CF has been as high as 3.77 and as low as 1.63, with a median of 2.65.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Telephone & Data Systems is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TDS feels like a great value stock at the moment.


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Zacks Investment Research