Shares of FedEx (FDX, Financial) experienced a decline, dropping 11.95%, following recent governmental announcements concerning tariffs on U.S. imports.
Currently trading at $215.86, FedEx Corp. (FDX, Financial) stands out as the world's largest express courier delivery firm. Despite the downward movement, it's essential to consider FedEx's valuation metrics. With a GF Value of $254.70, the stock is deemed "Modestly Undervalued" according to GF Value. This positions FedEx as potentially attractive for long-term investors, especially given that its current price is close to a 2-year low.
The company's Price-to-Earnings (PE) ratio stands at 13.54, which is notably near its 2-year low. The Price-to-Book (PB) ratio is at 1.94, and Price-to-Sales (PS) ratio is 0.63, both metrics indicating that FedEx is trading close to its historical lows. This could suggest that the stock is currently undervalued in the market.
From a profitability standpoint, FedEx's operating margin is expanding, indicating operational improvements. Its dividend yield is close to a 3-year high, enhancing the attractiveness of the stock for income-seeking investors. Furthermore, insider buying activity has been observed, with recent purchases totaling 1,000 shares over the past three months.
However, caution is warranted due to certain warning signs. FedEx's Altman Z-Score of 2.56 is in the grey area, suggesting some financial stress. Additionally, asset growth surpassing revenue growth over the past five years indicates potential inefficiencies. Despite these concerns, the company's Beneish M-Score suggests it is unlikely to be a manipulator, which is reassuring for investors.
In summary, while the recent stock price drop indicates market concerns, FedEx (FDX, Financial) presents several appealing valuation metrics and potential for operational improvement, positioning it as a stock worth considering for investors with a long-term horizon.
