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PCAR vs. FOXF: Which Stock Is the Better Value Option?

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Investors with an interest in Automotive - Domestic stocks have likely encountered both Paccar (PCAR - Free Report) and Fox Factory Holding (FOXF - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Paccar has a Zacks Rank of #2 (Buy), while Fox Factory Holding has a Zacks Rank of #3 (Hold). This means that PCAR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

PCAR currently has a forward P/E ratio of 10.95, while FOXF has a forward P/E of 21.48. We also note that PCAR has a PEG ratio of 1.09. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FOXF currently has a PEG ratio of 1.97.

Another notable valuation metric for PCAR is its P/B ratio of 3.23. 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, FOXF has a P/B of 4.03.

Based on these metrics and many more, PCAR holds a Value grade of A, while FOXF has a Value grade of C.

PCAR sticks out from FOXF in both our Zacks Rank and Style Scores models, so value investors will likely feel that PCAR is the better option right now.


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