Investors with an interest in Automotive – Domestic stocks have likely encountered both Ford Motor Company (F) and Tesla (TSLA). But which of these two stocks is more attractive to value investors? We’ll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Ford Motor Company and Tesla are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that F has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
F currently has a forward P/E ratio of 5.87, while TSLA has a forward P/E of 76.01. We also note that F has a PEG ratio of 0.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. TSLA currently has a PEG ratio of 3.52.
Another notable valuation metric for F is its P/B ratio of 1.10. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. By comparison, TSLA has a P/B of 9.18.
These are just a few of the metrics contributing to F’s Value grade of A and TSLA’s Value grade of F.
F sticks out from TSLA in both our Zacks Rank and Style Scores models, so value investors will likely feel that F is the better option right now.
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Ford Motor Company (F) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
