Why US Foods Holding Corp. (NYSE:USFD) Could Be Worth Watching
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Is US Foods Holding Still Cheap?
According to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. We find that US Foods Holding's ratio of 31.28x is above its peer average of 24.99x, which suggests the stock is trading at a higher price compared to the Consumer Retailing industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since US Foods Holding's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Check out our latest analysis for US Foods Holding
What does the future of US Foods Holding look like?
NYSE:USFD Earnings and Revenue Growth May 7th 2025
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 100% over the next couple of years, the future seems bright for US Foods Holding. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? USFD's optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe USFD should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
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