We look at Central Garden & Pet Company (NASDAQ:CENT) [Trend Analysis] a company in the Food – Major Diversified industry which lately stock market players have been interested in, to assess if it provides value for investors considering buying or selling it. Currently Central Garden & Pet Company is trading at $12.00 after moving down -0.66% in the previous day of trading.
CENT is trading with a trailing 12 month P/E multiple of 18.46 and an estimated forward P/E multiple of 14.63. The stock has an estimated 5 year annual growth of 9.98% and a PEG multiple of 1.85.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Central Garden & Pet Company is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of CENT. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of CENT being 1.85, we consider Central Garden & Pet Company to likely be priced at fair value.
This analysis means that value buyers who do not currently hold Central Garden & Pet Company (NASDAQ:CENT) should probably look for better value alternatives and investors currently holding the stock should either continue to hold or sell and look for alternatives.
The mean analyst 12 month target price for Central Garden & Pet Company (NASDAQ:CENT) is currently $10.00 or 16.67% below the current price. Additionally, the stock has been as high as $12.34 and as low as $6.50 in the last 52 weeks. Analysts are estimating that CENT will report earnings per share of -$0.07 next quarter.
The post Is Central Garden & Pet Company Underpriced? (NASDAQ:CENT) appeared first on Stock Markets Daily.