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GM vs. FOXF: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Automotive - Domestic sector might want to consider either General Motors Company (GM - Free Report) or Fox Factory Holding (FOXF - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

General Motors Company has a Zacks Rank of #1 (Strong Buy), while Fox Factory Holding has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GM has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GM currently has a forward P/E ratio of 4.46, while FOXF has a forward P/E of 20.92. We also note that GM has a PEG ratio of 0.49. 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. FOXF currently has a PEG ratio of 4.26.

Another notable valuation metric for GM is its P/B ratio of 0.68. 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. By comparison, FOXF has a P/B of 1.76.

These are just a few of the metrics contributing to GM's Value grade of A and FOXF's Value grade of C.

GM stands above FOXF thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GM is the superior value option right now.


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