Is Asbury Automotive Group (ABG) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Asbury Automotive Group (ABG) is a stock many investors are watching right now. ABG is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value.
We also note that ABG holds a PEG ratio of 0.42. 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. ABG's PEG compares to its industry's average PEG of 0.48. ABG's PEG has been as high as 0.78 and as low as 0.41, with a median of 0.57, all within the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ABG has a P/S ratio of 0.38. This compares to its industry's average P/S of 0.4.
Finally, we should also recognize that ABG has a P/CF ratio of 6.86. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.30. Over the past year, ABG's P/CF has been as high as 12.40 and as low as 6.78, with a median of 9.18.
These are just a handful of the figures considered in Asbury Automotive Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ABG is an impressive value stock right now.
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Asbury Automotive Group, Inc. (ABG): Free Stock Analysis Report
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