As of July 18, 2023, Comerica Inc (CMA, Financial) saw a day's change of 4.06%, with a stock price of $50.01. With a market cap of $6.6 billion and sales reaching $3.8 billion, the company's GF Value stands at $94.94, indicating that the stock is significantly undervalued.
Headquartered in Dallas, Comerica is a financial services company primarily focused on relationship-based commercial banking. It operates primarily in Texas, California, and Michigan, with additional locations in Arizona and Florida. The company also has select businesses operating in other states and Canada.
GF Value and Stock Valuation
The GF Value is a unique stock valuation method, incorporating historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. The GF Value Line represents the fair value at which the stock should ideally be traded. Currently, Comerica's stock is trading significantly below the GF Value Line, suggesting it is significantly undervalued and likely to deliver higher future returns.
Financial Strength
Investors must review a company’s financial strength to avoid permanent capital loss. Comerica's cash-to-debt ratio is 0.59, ranking worse than 68.73% of companies in the Banks industry. This indicates that Comerica's overall financial strength is poor, scoring 3 out of 10.
Profitability
Comerica has been profitable 10 times over the past 10 years. With a revenue of $3.8 billion and EPS of $9.49 over the past twelve months, the company's operating margin is 0%, ranking worse than 0% of companies in the Banks industry. This indicates fair profitability, with a rank of 5 out of 10.
Growth
Comerica’s 3-year average revenue growth rate is better than 50.68% of companies in the Banks industry. However, its 3-year average EBITDA growth rate is 0%, ranking worse than 0% of companies in the Banks industry.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) to the weighted average cost of capital (WACC), provides insight into its profitability. Comerica’s ROIC is 0, and its WACC is 5.59 for the past 12 months.
Conclusion
In conclusion, Comerica (CMA, Financial) stock appears significantly undervalued. Despite its poor financial condition, the company's profitability is fair. Its growth ranks worse than 0% of companies in the Banks industry. For more information about Comerica stock, you can check out its 30-Year Financials here.
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