Agilent Technologies Inc (NYSE:A) is an $18.12 billion company today. Investors that bought shares one year ago are sitting on a 25.94% total return. That's above the S&P 500's return of 16.29%.
Agilent stock is beating the market, and it reports quarterly earnings tomorrow. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
"EPS is an indicator of a company’s profitability and is considered to be one of the most important variables in determining a company’s share price. At Investment U and The Oxford Club, we look for companies that grow their earnings year-over-year." data-original-title="Earnings-per-Share">Earnings-per-Share (EPS) Growth:Agilent reported a recent EPS growth rate of 40.54%. That's below the healthcare sector average of 62.43%. That's not a good sign. We like to see companies that have higher earnings growth. " P/E is a valuation ratio of a company’s EPS compared to its current share price. Generally speaking, a high P/E means the market is bullish on a stock, but it can also signal that a stock is overpriced. What we look for is a stock trading below its industry average. This means we can get a better deal on a stock compared to its peers." data-original-title="Price-to-Earnings">Price-to-Earnings (P/E):The average price-to-earnings ratio of the healthcare sector is 32. And Foot Locker (NYSE:FL)'s ratio comes in at 32.20. The company looks expensive compared to many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for Agilent stock is 46.33%. That's below the healthcare sector average of 59.09%. The company is less leveraged.
✗ Free Cash Flow per Share Growth : Agilent's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of Agilent comes in at 15.75% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Agilent's profit margin is above the healthcare average of 11.86%. So that's a positive indicator for investors.
✗ Return on Equity (ROE) gives us a look at the amount of net income returned to shareholders. It tells us how much profit a company produces with the money shareholders invest. This is another metric that is useful in comparison to other companies in the same industry.
: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Agilent is 12.16%, and that's below its sector average ROE of 17.98%.
Agilent stock passes two of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold With Caution.