A strong performer from today's afternoon trading session is Sony, whose shares rose 3.3% to $21.8 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Sony Is Potentially Undervalued and Trades Below Its Fair Value:
Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 23.09 and an average price to book (P/B) ratio of 3.3. In contrast, Sony has a trailing 12 month P/E ratio of 17.9 and a P/B ratio of 0.02.
Sony has moved 16.7% over the last year compared to 30.3% for the S&P 500 — a difference of -13.6%. Sony has a 52 week high of $22.04 and a 52 week low of $15.02.
Generally Positive Cash Flows but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $8,665,687 | $8,259,885 | $8,999,360 | $9,921,513 | $10,974,373 | $13,020,768 |
| Operating Margins | 10% | 10% | 11% | 12% | 12% | 9% |
| Net Margins | 11% | 7% | 13% | 9% | 9% | 8% |
| Net Income (M) | $916,271 | $582,191 | $1,171,776 | $888,406 | $1,011,773 | $980,494 |
| Diluted Shares (M) | 1,295 | 1,262 | 1,251 | 1,357 | 1,352 | 1,330 |
| Earnings Per Share | $707.74 | $461.23 | $936.9 | $705.16 | $809.85 | $785.68 |
| EPS Growth | n/a | -34.83% | 103.13% | -24.73% | 14.85% | -2.98% |
| Free Cash Flow (M) | $946,094 | $909,984 | $837,911 | $1,233,643 | $314,691 | $1,373,213 |
| Total Debt (M) | $568,372 | $634,966 | $773,294 | $1,203,646 | $1,767,696 | $2,058,117 |
| Net Debt / EBITDA | -0.71 | -0.7 | -0.74 | -0.4 | 0.12 | 0.06 |
| Current Ratio | 0.86 | 0.91 | 0.92 | 0.63 | 0.61 | 0.66 |
Sony has generally positive cash flows, positive EPS growth, and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.66. Finally, we note that Sony has decent operating margins with a stable trend.
