Sony shares fell by -1.6% during the day's afternoon session, and are now trading at a price of $27.57. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
The Market May Be Undervaluing Sony's Assets and Equity:
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 25.91 and an average price to book (P/B) ratio of 3.03. In contrast, Sony has a trailing 12 month P/E ratio of 20.7 and a P/B ratio of 0.02.
Sony has moved 43.5% over the last year compared to 15.1% for the S&P 500 — a difference of 28.4%. Sony has a 52 week high of $29.16 and a 52 week low of $17.42.
Generally Positive Cash Flows but Not Enough Current Assets to Cover Current Liabilities:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $8,259,885 | $8,999,360 | $9,921,513 | $10,974,373 | $13,020,768 | $12,957,064 |
| Operating Margins | 10% | 11% | 12% | 12% | 9% | 11% |
| Net Margins | 7% | 13% | 9% | 9% | 8% | 9% |
| Net Income (M) | $582,191 | $1,171,776 | $888,406 | $1,011,773 | $980,494 | $1,159,887 |
| Diluted Shares (M) | 1,262 | 1,251 | 1,357 | 1,352 | 1,330 | 6,551 |
| Earnings Per Share | $461.23 | $936.9 | $705.16 | $161.97 | $157.14 | $187.92 |
| EPS Growth | n/a | 103.13% | -24.73% | -77.03% | -2.98% | 19.59% |
| Free Cash Flow (M) | $909,984 | $837,911 | $1,233,643 | $314,691 | $1,373,213 | $2,321,675 |
| Total Debt (M) | $634,966 | $773,294 | $1,203,646 | $1,767,696 | $2,058,117 | $2,066,842 |
| Net Debt / EBITDA | -0.7 | -0.74 | -0.4 | 0.12 | 0.06 | -0.36 |
| Current Ratio | 0.91 | 0.92 | 0.63 | 0.61 | 0.66 | 0.7 |
