Is IHS Markit Stock Undervalued or Overvalued Before Earnings?
IHS Markit (Nasdaq: INFO) is a large cap company that operates within the professional services industry. Its market cap is $20 billion today, and the total one-year return is 28.63% for shareholders.
IHS Markit stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: IHS Markit stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the professional services industry is 34.76. And IHS Markit's ratio comes in at 51.74. Its valuation looks expensive compared to many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for IHS Markit stock is 51.97%. That's below the professional services industry average of 92.39%. The company is less leveraged.
✗ Free Cash Flow per Share Growth : IHS Markit's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of IHS Markit comes in at 10.96% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. IHS Markit's profit margin is above the professional services average of 10.2%. So that's a positive indicator for investors.
✗ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for IHS Markit is 4.47%, and that's below its industry average ROE of 23.87%.
IHS Markit stock passes two of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold With Caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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