Are Investors Undervaluing Stellantis (STLA) 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. Nevertheless, we are always paying attention to...
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 company to watch right now is Stellantis (STLA). STLA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 4.92, which compares to its industry's average of 11.01. Over the past year, STLA's Forward P/E has been as high as 7.23 and as low as 4.38, with a median of 5.32.
Another valuation metric that we should highlight is STLA's P/B ratio of 0.72. 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. This stock's P/B looks solid versus its industry's average P/B of 1.11. STLA's P/B has been as high as 1.46 and as low as 0.64, with a median of 1.10, over 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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. STLA has a P/S ratio of 0.41. This compares to its industry's average P/S of 0.59.
Finally, our model also underscores that STLA has a P/CF ratio of 5.34. 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 6.44. STLA's P/CF has been as high as 5.84 and as low as 3.16, with a median of 4.84, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Stellantis is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, STLA feels like a great value stock at the moment.
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