Pilgrim’s Pride Corporation (NASDAQ: PPC) isn’t the largest company out there, but it has led the NASDAQGS winners with a relatively large price hike for the past few weeks. As a mid-cap stock with high analyst coverage, you can expect the most recent changes in the company’s outlook to be priced into the stock. But what if the stock is still a bargain? Let’s take a look at the prospect and value of Pilgrim’s Pride based on the latest financial data to see if the opportunity still exists.
Check out our latest analysis for Pilgrim’s Pride
What is pilgrim pride worth?
According to my price multiple model, where I compare the company’s price-earnings ratio to the industry average, the stock looks expensive right now. In this case, I used price-to-earnings (PE) because there isn’t enough information to reliably predict the stock’s cash flows. I find that the Pilgrim’s Pride quote of 46.04x is above the comparative average of 22.73x, suggesting the stock is trading at a higher price compared to the food industry. But is there any other way to buy cheap in the future? Given that Pilgrim’s Pride’s share is quite volatile (i.e. its price moves are increased compared to the rest of the market) it could mean the price can go lower, giving us another chance to buy in the future. This is based on the high beta which is a good indicator of the volatility of the stock price.
Can we expect growth from pilgrim pride?
NasdaqGS: PPC earnings and revenue growth May 6, 2021
The future outlook is an important consideration when looking to buy a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with solid prospects at a great price is always a good investment. So let’s also look at the company’s future expectations. With earnings expected to more than double over the next few years, the future looks bright for Pilgrim’s Pride. It looks like higher cash flow is on the way for the stock, which should translate into a higher stock valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in the positive outlook for PPC as the stocks trade above the multiple of the industry price. At this current price, shareholders may be asking a different question: should I sell? If you think PPC should trade below its current price, it can be profitable to sell high and buy again when its price falls towards the industry PE ratio. Before making that decision, check to see if the basics have changed.
Are you a potential investor? If you’ve been keeping your eye on PPC for a while, this may not be the best time to get into the stock. The price has outperformed its industry peers, which means there are probably no more benefits from mispricing. However, the positive outlook for PPC is encouraging, which is why it is worth delving deeper into other factors to take advantage of the next price drop.
So, if you want to dig deeper into this stock, it’s important to consider all of the risks it faces. In doing our analysis, we found that Pilgrim’s has Pride 4 warning signs and it would be unwise to ignore them.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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