REV GROUP INC (NYSE:REVG) is an undervalued gem with solid fundamentals.

Uncover the hidden value in REV GROUP INC (NYSE:REVG) as our stock screening tool recommends it as an undervalued choice. REVG maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Valuation Assessment of REVG

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. REVG has achieved a 7 out of 10:

• 69.05% of the companies in the same industry are more expensive than REVG, based on the Price/Earnings ratio.
• REVG is valuated rather cheaply when we compare the Price/Earnings ratio to 28.78, which is the current average of the S&P500 Index.
• The Price/Forward Earnings ratio is 10.31, which indicates a very decent valuation of REVG.
• Based on the Price/Forward Earnings ratio, REVG is valued cheaply inside the industry as 91.27% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Forward Earnings ratio of 21.81, REVG is valued rather cheaply.
• Based on the Enterprise Value to EBITDA ratio, REVG is valued a bit cheaper than 66.67% of the companies in the same industry.
• REVG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. REVG is cheaper than 69.05% of the companies in the same industry.
• REVG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• REVG has a very decent profitability rating, which may justify a higher PE ratio.
• REVG's earnings are expected to grow with 33.71% in the coming years. This may justify a more expensive valuation.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of REVG, the assigned 6 is noteworthy for profitability:

• With a decent Return On Assets value of 7.50%, REVG is doing good in the industry, outperforming 69.84% of the companies in the same industry.
• REVG has a better Return On Equity (21.71%) than 83.33% of its industry peers.
• REVG has a Return On Invested Capital of 12.12%. This is in the better half of the industry: REVG outperforms 76.19% of its industry peers.
• The 3 year average ROIC (7.94%) for REVG is below the current ROIC(12.12%), indicating increased profibility in the last year.
• REVG's Profit Margin has improved in the last couple of years.
• In the last couple of years the Operating Margin of REVG has grown nicely.
• REVG's Gross Margin has improved in the last couple of years.

Assessing Health Metrics for REVG

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. REVG has received a 7 out of 10:

• An Altman-Z score of 3.96 indicates that REVG is not in any danger for bankruptcy at the moment.
• REVG's Altman-Z score of 3.96 is fine compared to the rest of the industry. REVG outperforms 62.70% of its industry peers.
• The Debt to FCF ratio of REVG is 1.59, which is an excellent value as it means it would take REVG, only 1.59 years of fcf income to pay off all of its debts.
• REVG has a Debt to FCF ratio of 1.59. This is amongst the best in the industry. REVG outperforms 80.95% of its industry peers.
• A Debt/Equity ratio of 0.33 indicates that REVG is not too dependend on debt financing.
• With a decent Debt to Equity ratio value of 0.33, REVG is doing good in the industry, outperforming 61.90% of the companies in the same industry.

Understanding REVG's Growth Score

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. REVG has achieved a 5 out of 10:

• The Earnings Per Share has grown by an impressive 20.27% over the past year.
• The Earnings Per Share has been growing by 29.36% on average over the past years. This is a very strong growth
• REVG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 33.71% yearly.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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Check the latest full fundamental report of REVG for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.