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Is General Motors (GM) Stock Undervalued Right Now?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is General Motors (GM - Free Report) . GM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.24, which compares to its industry's average of 10.29. Over the past 52 weeks, GM's Forward P/E has been as high as 7.23 and as low as 5.15, with a median of 6.15.
We also note that GM holds a PEG ratio of 0.74. 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. GM's industry has an average PEG of 1.05 right now. Within the past year, GM's PEG has been as high as 1.28 and as low as 0.61, with a median of 0.74.
Investors should also recognize that GM has a P/B ratio of 1.35. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.46. Over the past 12 months, GM's P/B has been as high as 1.78 and as low as 1.05, with a median of 1.37.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GM has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.74.
Finally, investors will want to recognize that GM has a P/CF ratio of 3.98. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. GM's P/CF compares to its industry's average P/CF of 6.49. Over the past year, GM's P/CF has been as high as 8.51 and as low as 3.12, with a median of 6.34.
These are only a few of the key metrics included in General Motors's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GM looks like an impressive value stock at the moment.
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Is General Motors (GM) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is General Motors (GM - Free Report) . GM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.24, which compares to its industry's average of 10.29. Over the past 52 weeks, GM's Forward P/E has been as high as 7.23 and as low as 5.15, with a median of 6.15.
We also note that GM holds a PEG ratio of 0.74. 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. GM's industry has an average PEG of 1.05 right now. Within the past year, GM's PEG has been as high as 1.28 and as low as 0.61, with a median of 0.74.
Investors should also recognize that GM has a P/B ratio of 1.35. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.46. Over the past 12 months, GM's P/B has been as high as 1.78 and as low as 1.05, with a median of 1.37.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. GM has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.74.
Finally, investors will want to recognize that GM has a P/CF ratio of 3.98. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. GM's P/CF compares to its industry's average P/CF of 6.49. Over the past year, GM's P/CF has been as high as 8.51 and as low as 3.12, with a median of 6.34.
These are only a few of the key metrics included in General Motors's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GM looks like an impressive value stock at the moment.