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

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Investors interested in Automotive - Domestic stocks are likely familiar with Paccar (PCAR - Free Report) and Fox Factory Holding (FOXF - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Paccar and Fox Factory Holding have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PCAR currently has a forward P/E ratio of 11.15, while FOXF has a forward P/E of 28.52. We also note that PCAR has a PEG ratio of 1.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FOXF currently has a PEG ratio of 2.28.

Another notable valuation metric for PCAR is its P/B ratio of 2.61. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FOXF has a P/B of 7.68.

These metrics, and several others, help PCAR earn a Value grade of A, while FOXF has been given a Value grade of D.

Both PCAR and FOXF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PCAR is the superior value option right now.


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