JELD-WEN Holding Inc (JELD, Financial), a prominent player in the door and window manufacturing sector, has recently experienced a daily loss of -9.74% and a 3-month loss of -4.92%. Despite this, the company reported an Earnings Per Share (EPS) (EPS) of $0.64. This raises the question: is JELD-WEN Holding significantly undervalued? In this article, we delve into a comprehensive valuation analysis of JELD-WEN Holding to answer this question and provide investors with valuable insights.
Company Overview
JELD-WEN Holding Inc is a leading name in the door and window manufacturing industry. The company designs, produces, and distributes a variety of interior and exterior building products, including doors, windows, and walls. Its products are widely used in the new construction of residential single and multi-family homes and non-residential buildings. The primary operating segments of JELD-WEN Holding are North America, Europe, and Australasia, with the majority of its revenue generated from North America.
The company's current stock price is $13.71, with a market cap of $1.20 billion. However, the estimated fair value (GF Value) of the stock is $27.56, suggesting that the stock might be significantly undervalued.
Understanding the GF Value
The GF Value is a unique measure of a stock's intrinsic value, calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. If a stock's price is significantly above the GF Value Line, it is considered overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, the stock is undervalued, and its future return will likely be higher.
For JELD-WEN Holding, the stock is believed to be significantly undervalued. This suggests that the long-term return of its stock is likely to be much higher than its business growth.
For more companies that may deliver higher future returns at reduced risk, check out these high-quality companies.
Financial Strength
Investing in companies with low financial strength could result in permanent capital loss. Therefore, it's crucial to review a company's financial strength before deciding to buy shares. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. JELD-WEN Holding has a cash-to-debt ratio of 0.1, which ranks worse than 87.69% of 1608 companies in the Construction industry. Based on this, GuruFocus ranks JELD-WEN Holding's financial strength as 5 out of 10, suggesting a fair balance sheet.
Profitability and Growth
Investing in profitable companies, especially those that have demonstrated consistent profitability over the long term, poses less risk. JELD-WEN Holding has been profitable 8 out of the past 10 years. Over the past twelve months, the company had a revenue of $5 billion and an EPS of $0.64. Its operating margin is 4.27%, which ranks worse than 53.86% of 1606 companies in the Construction industry. Overall, GuruFocus ranks the profitability of JELD-WEN Holding at 7 out of 10, which indicates fair profitability.
Growth is probably the most important factor in the valuation of a company. The 3-year average annual revenue growth of JELD-WEN Holding is 11.7%, which ranks better than 74.21% of 1547 companies in the Construction industry. The 3-year average EBITDA growth rate is 1.6%, which ranks worse than 55.09% of 1316 companies in the Construction industry.
Conclusion
In conclusion, the stock of JELD-WEN Holding is believed to be significantly undervalued. The company's financial condition is fair, and its profitability is fair. Its growth ranks worse than 55.09% of 1316 companies in the Construction industry. To learn more about JELD-WEN Holding stock, you can check out its 30-Year Financials here.
To find out the high-quality companies that may deliver above-average returns, please check out GuruFocus High Quality Low Capex Screener.
