Investors could be interested in the following securities, as their forward price-earnings ratios are lower than the S&P 500's historical average price-earnings ratio of 15. The projections of future earnings are based on data from Morningstar analysts.
BRP Inc.
The first stock that makes the cut is BRP Inc. (DOOO, Financial), a Canadian manufacturer of power sports vehicles and marine products that it markets worldwide.
BRP Inc. has a forward price-earnings ratio of 9, which results from Wednesday’s closing price of $80.05 per share and analyst expectations for net earnings per share of approximately $8.89 for the next full fiscal year.
The stock has risen 18.24% over the past year for a market capitalization of $6.59 billion and a 52-week range of $65.01 to $102.96.
GuruFocus has assigned a rating of 4 out of 10 for the company's financial strength and a rating of 8 out of 10 for its profitability.
Wall Street sell-side analysts recommend a median rating of buy for this stock with an average price target of $110.10 per share.
Rackspace Technology Inc.
The second stock that qualifies is Rackspace Technology, Inc. (RXT, Financial), a San Antonio, Texas-based multi-cloud technology services company serving several industries worldwide, including financial, oil and gas, media and entertainment, automotive and transportation, food and beverage and public sectors.
Rackspace Technology has a forward price-earnings ratio of 11.27, which derives from Wednesday’s closing price of $12.32 per share and analyst expectations for earnings of approximately $1.09 per share for the next full fiscal year.
The stock has dropped by 47% over the past year for a market capitalization of $2.59 billion and a 52-week range of $11.76 to $26.43.
GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and a rating of 2 out of 10 for its profitability.
Wall Street sell-side analysts recommend a median rating of overweight with an average price target of $20.78 per share for this stock.
Encore Capital Group Inc.
The third stock that makes the cut is Encore Capital Group Inc. (ECPG, Financial), a San Diego, California-based financial services company providing debt recovery solutions services to several businesses worldwide.
Encore Capital Group Inc. has a forward price-earnings ratio of 7.26, which derives from Wednesday’s closing price of $64.16 per share and analyst expectations for earnings of approximately $8.837 per share for the next full fiscal year.
The stock has risen by 109.39% over the past year for a market capitalization of $1.88 billion and a 52-week range of $29.65 to $67.94.
GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and a rating of 7 out of 10 for its profitability.
Wall Street sell-side analysts recommend a median rating of overweight and have established an average price target of $69 per share for the stock.
