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GM or TSLA: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Automotive - Domestic sector have probably already heard of General Motors Company (GM - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, General Motors Company has a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #3 (Hold). This means that GM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
GM currently has a forward P/E ratio of 5.50, while TSLA has a forward P/E of 72.65. We also note that GM has a PEG ratio of 0.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSLA currently has a PEG ratio of 2.95.
Another notable valuation metric for GM is its P/B ratio of 0.71. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TSLA has a P/B of 16.79.
These metrics, and several others, help GM earn a Value grade of A, while TSLA has been given a Value grade of D.
GM stands above TSLA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GM is the superior value option right now.
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GM or TSLA: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Automotive - Domestic sector have probably already heard of General Motors Company (GM - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, General Motors Company has a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #3 (Hold). This means that GM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
GM currently has a forward P/E ratio of 5.50, while TSLA has a forward P/E of 72.65. We also note that GM has a PEG ratio of 0.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TSLA currently has a PEG ratio of 2.95.
Another notable valuation metric for GM is its P/B ratio of 0.71. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TSLA has a P/B of 16.79.
These metrics, and several others, help GM earn a Value grade of A, while TSLA has been given a Value grade of D.
GM stands above TSLA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GM is the superior value option right now.