PGT Innovations, Inc. (NYSE:PGTI) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of PGTI, it is a financially-robust company with a an impressive track record of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Innovations here.
Undervalued with proven track record
In the previous year, PGTI has ramped up its bottom line by 36%, with its latest earnings level surpassing its average level over the last five years. Not only did PGTI outperformed its past performance, its growth also exceeded the Building industry expansion, which generated a 34% earnings growth. This paints a buoyant picture for the company. PGTI’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that PGTI manages its cash and cost levels well, which is a key determinant of the company’s health. PGTI appears to have made good use of debt, producing operating cash levels of 0.27x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
PGTI’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the building industry, PGTI is also trading below its peers, relative to earnings generated. This bolsters the proposition that PGTI’s price is currently discounted.
For Innovations, I’ve put together three pertinent factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PGTI’s future growth? Take a look at our free research report of analyst consensus for PGTI’s outlook.
- Dividend Income vs Capital Gains: Does PGTI return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from PGTI as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PGTI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.