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NASDAQ:TRMD is probably undervalued for the fundamentals it is displaying.

By Mill Chart

Last update: Nov 29, 2023

TORM PLC-A (NASDAQ:TRMD) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:TRMD showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Understanding NASDAQ:TRMD's Valuation

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. NASDAQ:TRMD has achieved a 9 out of 10:

  • TRMD is valuated cheaply with a Price/Earnings ratio of 3.62.
  • 88.89% of the companies in the same industry are more expensive than TRMD, based on the Price/Earnings ratio.
  • When comparing the Price/Earnings ratio of TRMD to the average of the S&P500 Index (24.46), we can say TRMD is valued rather cheaply.
  • A Price/Forward Earnings ratio of 4.73 indicates a rather cheap valuation of TRMD.
  • TRMD's Price/Forward Earnings ratio is rather cheap when compared to the industry. TRMD is cheaper than 88.89% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 19.59, TRMD is valued rather cheaply.
  • 73.61% of the companies in the same industry are more expensive than TRMD, based on the Enterprise Value to EBITDA ratio.
  • Based on the Price/Free Cash Flow ratio, TRMD is valued cheaply inside the industry as 82.41% of the companies are valued more expensively.
  • TRMD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • TRMD has an outstanding profitability rating, which may justify a higher PE ratio.

A Closer Look at Profitability for NASDAQ:TRMD

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:TRMD was assigned a score of 8 for profitability:

  • With an excellent Return On Assets value of 24.66%, TRMD belongs to the best of the industry, outperforming 84.72% of the companies in the same industry.
  • With an excellent Return On Equity value of 44.18%, TRMD belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
  • The Return On Invested Capital of TRMD (22.72%) is better than 83.80% of its industry peers.
  • The 3 year average ROIC (8.75%) for TRMD is below the current ROIC(22.72%), indicating increased profibility in the last year.
  • With an excellent Profit Margin value of 43.82%, TRMD belongs to the best of the industry, outperforming 82.87% of the companies in the same industry.
  • TRMD's Profit Margin has improved in the last couple of years.
  • Looking at the Operating Margin, with a value of 45.84%, TRMD is in the better half of the industry, outperforming 79.17% of the companies in the same industry.
  • TRMD's Operating Margin has improved in the last couple of years.
  • TRMD has a better Gross Margin (73.18%) than 76.85% of its industry peers.
  • In the last couple of years the Gross Margin of TRMD has grown nicely.

Assessing Health Metrics for NASDAQ:TRMD

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:TRMD has earned a 7 out of 10:

  • TRMD has an Altman-Z score of 3.54. This indicates that TRMD is financially healthy and has little risk of bankruptcy at the moment.
  • The Altman-Z score of TRMD (3.54) is better than 77.78% of its industry peers.
  • The Debt to FCF ratio of TRMD is 2.24, which is a good value as it means it would take TRMD, 2.24 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 2.24, TRMD is in the better half of the industry, outperforming 68.52% of the companies in the same industry.
  • Even though the debt/equity ratio score it not favorable for TRMD, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
  • A Current Ratio of 2.33 indicates that TRMD has no problem at all paying its short term obligations.
  • TRMD has a better Current ratio (2.33) than 77.78% of its industry peers.
  • TRMD has a Quick Ratio of 2.09. This indicates that TRMD is financially healthy and has no problem in meeting its short term obligations.
  • With a decent Quick ratio value of 2.09, TRMD is doing good in the industry, outperforming 77.31% of the companies in the same industry.

Looking at the Growth

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. NASDAQ:TRMD has achieved a 5 out of 10:

  • The Earnings Per Share has grown by an impressive 104.29% over the past year.
  • Measured over the past years, TRMD shows a very strong growth in Earnings Per Share. The EPS has been growing by 157.48% on average per year.
  • The Revenue has grown by 33.31% in the past year. This is a very strong growth!
  • TRMD shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.05% yearly.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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TORM PLC-A

NASDAQ:TRMD (2/21/2024, 7:11:54 PM)

After market: 33.57 +0.23 (+0.69%)

33.34

-0.29 (-0.86%)

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