Is Santander Consumer (SC) 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...
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Santander Consumer (SC). SC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SC has a P/S ratio of 1.57. This compares to its industry's average P/S of 1.59.
Finally, we should also recognize that SC has a P/CF ratio of 2.74. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.31. Over the past year, SC's P/CF has been as high as 3.14 and as low as 2.03, with a median of 2.57.
These are only a few of the key metrics included in Santander Consumer'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, SC looks like an impressive value stock at the moment.
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Santander Consumer USA Holdings Inc. (SC): Free Stock Analysis Report
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