How does it rank on the evaluation measures?
Kroger Co (KR) achieves a strong evaluation score of 75 from Investors Observer Analysis. Our proprietary rating system takes into account the overall health of the business by examining the stock’s price, earnings and growth rate to determine if it represents good value. KR holds better value than 75% of the shares at its current price. Investors who focus on long-term growth through buy and hold investments will find the valuation ranking particularly relevant when allocating their assets.
KR has a twelve-month price-to-earnings (PE) ratio of 18. The historical average of around 15 shows an average value for the KR share, as investors pay fair prices to the company’s earnings. KR’s average PE trailing ratio shows that the company has recently traded around its fair market value. Its 12-month earnings per share (EPS) of 2.11 justifies the current share price. However, leakage PE ratios do not take into account the company’s projected growth rate, so many newer companies have high PE ratios due to high growth potential attracting investors despite insufficient profits.
KR currently has a 12-month forward PEG to Growth Ratio of 1.47. The market is currently overvaluing KR over its projected growth due to the PEG ratio above fair market value of 1. KR’s PEG is derived from its forward price / earnings ratio divided by its growth rate. Because PEG ratios include more of a company’s overall health fundamentals with an additional focus on the future, they are one of the valuation metrics most used by analysts.
Overall, these valuation measures paint a rather poor picture of KR at its current price due to an overvalued PEG ratio despite strong growth. KR’s PE and PEG are below the market average, resulting in a valuation score of 75.
Click here for the full Kroger Co (KR) stock valuation report.