Is Rolls-Royce Holdings expensive at 860.8p?

Rolls-Royce Holdings (LON:RR.) is a £16.5bn in the Aerospace & Defense engineering company focused on power and propulsion systems. This giant of UK industry has multiple operating divisions, including Civil Aerospace, Defence Aerospace, Power Systems, and Nuclear.

Right now the Rolls-Royce share price is on the expensive side from a factor perspective, based on its Value Rank of 30. Let's see why this is.

A closer look at Rolls-Royce's Value Rank

We can see by using Rolls-Royce Holdings’s StockReport that the group has a:

• Negative rolling price to book value,
• No trailing twelve month price to earnings ratio due to FY18 losses
• Trailing twelve month price to free cashflow of 25.8
• No dividend yield (although this is forecast to change next year), and a
• Trailing twelve-month price to sales ratio of 1.05

This combination of financial traits suggests that Rolls-Royce Holdings stock is toward the more expensive end of the market. This could all change if the company can leave behind its losses and return to consistent profitability in the years ahead - the next step might be to see if Rolls has solid Quality and Momentum attributes to compensate for its current lack of value.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Rolls-Royce Holdings that you can find out about here.