Yahoo Autos WestRock Co Stock Gives Every Indication Of Being Significantly Overvalued
- By GF Value
The stock of WestRock Co (NYSE:WRK, 30-year Financials) appears to be significantly overvalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $59.74 per share and the market cap of $15.7 billion, WestRock Co stock appears to be significantly overvalued. GF Value for WestRock Co is shown in the chart below.
Because WestRock Co is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth, which averaged 5.3% over the past three years and is estimated to grow 3.14% annually over the next three to five years.
Link: These companies may deliever higher future returns at reduced risk.
Companies with poor financial strength offer investors a high risk of permanent capital loss. To avoid permanent capital loss, an investor must do their research and review a company's financial strength before deciding to purchase shares. Both the cash-to-debt ratio and interest coverage of a company are a great way to to understand its financial strength. WestRock Co has a cash-to-debt ratio of 0.04, which which ranks in the bottom 10% of the companies in Packaging & Containers industry. The overall financial strength of WestRock Co is 4 out of 10, which indicates that the financial strength of WestRock Co is poor. This is the debt and cash of WestRock Co over the past years:
