Market Inference Overview -- CX Stock

Now trading at a price of $6.0, Cemex has moved 6.0% so far today.

Cemex shares moved 22.2% over the last 52 weeks, with a high of $6.04 and a low of $3.2. During this time, the stock outperformed the S&P 500 index by 29.0%. As of January 2022, the company's 50-day average price is $5.0. CEMEX, S.A.B. de C. The mid-cap Industrials company has 43,535 full time employees and is based in San Pedro Garza García, Mexico. Cemex has not offered any dividends in the last year.

Good EPS Growth with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $13,130 $12,970 $14,548 $15,577
Revenue Growth n/a -1.22% 12.17% 7.07%
Gross Margins 32.8% 32.2% 32.1% 31.0%
Gross Margins Growth n/a -1.83% -0.31% -3.43%
Operating Margins 10.2% 10.4% 16.0% 10.0%
Operating Margins Growth n/a 1.96% 53.85% -37.5%
Net Margins 1.09% -11.31% 5.18% 5.51%
Net Margins Growth n/a -1137.61% 145.8% 6.37%
Earnings Per Share $0.09 -$1.0 $0.5 $0.37
EPS Growth n/a -1211.11% 150.0% -26.0%
Diluted Shares (MM) 1,577 1,496 1,495 1,451
Free Cash Flow (MM) $586 $987 $862 $415
FCF Growth n/a 68.43% -12.66% -51.86%
Capital Expenditures (MM) -$767 -$591 -$993 -$1,060
Net Debt / EBITDA 4.06 3.72 2.1 5.99

Cemex Is Currently Fairly Valued:

Compared to the Industrials sector's average of 20.49, Cemex has a trailing twelve month P/E ratio of 16.2 and, according to its EPS guidance of 0.61, an expected P/E ratio of 9.8. Cemex's PEG ratio is 0.23 based on its 61.4% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 18.0%, because the growth rate implied by Cemex's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.78, which still suggests that company's shares are possibly undervalued.

Furthermore, Cemex is likely undervalued in terms of its equity because its P/B ratio is 0.8 compared to its sector average of 3.78. The company's shares are now trading -22.8% below their Graham number, implying there is a margin of safety for the stock. We calculate the number according to this formula:

√(22.5 * EPS * book value per share) = √(22.5 * 0.37 * 7.25) = $7.77

Most of the Market Indicators on Cemex Are Negative:

18 analysts are following Cemex and have set target prices ranging from $4.7 to $9.5 per share. On average, they have given the company a rating of buy. At the current price of $6.0, CX is trading -7.69% away from its average analyst target price of $6.5 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.