Boeing Co (BA, Financial) has experienced a daily loss of -2.15%, and a 3-month loss of -3.03%. The company's Loss Per Share stands at 7.49. With these figures in mind, the question arises: Is the stock fairly valued? The following analysis dives deep into the valuation of Boeing Co, providing a comprehensive overview of its financial health and performance.
Company Introduction
Boeing Co is a leading aerospace and defense firm operating in four segments: commercial airplanes; defense, space, and security; Global services; and Boeing capital. Competing with Airbus in commercial airplanes and with Lockheed, Northrop, and several others in military aircraft and weaponry, Boeing Co has established a significant presence in the industry. The current stock price is $211.4, and with a GF Value of $232.04, it appears to be fairly valued.
Understanding the GF Value
The GF Value is a unique measure of a stock's intrinsic value, calculated based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line on our summary page provides an overview of the stock's fair trading value. If the stock price significantly deviates from the GF Value Line, it may indicate overvaluation or undervaluation, potentially influencing future returns.
With a market cap of $127.50 billion, Boeing Co's stock appears to be fairly valued at its current price of $211.4 per share. As a result, the long-term return of its stock is likely to align with the rate of its business growth.
Financial Strength
Investing in companies with low financial strength could lead to capital loss. Therefore, it's crucial to review a company's financial strength before investing. Boeing Co's cash-to-debt ratio of 0.26 ranks worse than 68.28% of companies in the Aerospace & Defense industry, suggesting a poor balance sheet.
Profitability and Growth
Investing in profitable companies typically carries less risk. Boeing Co has been profitable 6 years over the past 10 years, with revenues of $73.60 billion and a Loss Per Share of $7.49 in the past 12 months. However, its operating margin of -4.63% is worse than 75.53% of companies in the Aerospace & Defense industry, suggesting fair profitability.
Growth is a crucial factor in a company's valuation. Unfortunately, Boeing Co's growth ranks worse than 72.69% of companies in the Aerospace & Defense industry, with a 3-year average annual revenue growth of -6.1% and a 3-year average EBITDA growth rate of 0%.
ROIC vs WACC
Comparing a company's Return on Invested Capital (ROIC) to its Weighted Average Cost of Capital (WACC) can provide insights into its profitability. Over the past 12 months, Boeing Co's ROIC was -3.54, while its WACC was at 10.74, suggesting the company is not creating value for shareholders.
Conclusion
Overall, Boeing Co (BA, Financial) stock appears to be fairly valued. The company's financial condition is poor, and its profitability is fair. Its growth ranks worse than 0% of 228 companies in the Aerospace & Defense industry. For more information about Boeing Co stock, you can check out its 30-Year Financials here.
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