GPC vs. CARG: Which Stock Should Value Investors Buy Now?
GPC vs. CARG: Which Stock Is the Better Value Option?
Investors looking for stocks in the Automotive - Replacement Parts sector might want to consider either Genuine Parts (GPC) or CarGurus (CARG). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Genuine Parts has a Zacks Rank of #2 (Buy), while CarGurus has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GPC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GPC currently has a forward P/E ratio of 20.58, while CARG has a forward P/E of 23.28. We also note that GPC has a PEG ratio of 1.72. 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. CARG currently has a PEG ratio of 2.33.
Another notable valuation metric for GPC is its P/B ratio of 6.15. 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, CARG has a P/B of 6.74.
These are just a few of the metrics contributing to GPC's Value grade of B and CARG's Value grade of C.
GPC has seen stronger estimate revision activity and sports more attractive valuation metrics than CARG, so it seems like value investors will conclude that GPC is the superior option right now.
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Genuine Parts Company (GPC): Free Stock Analysis Report
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