Are Investors Undervaluing Stellantis (STLA) Right Now?

STLA

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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Stellantis (STLA - Free Report) is a stock many investors are watching right now. STLA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

We also note that STLA holds a PEG ratio of 0.81. 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. STLA's industry currently sports an average PEG of 1.06. Over the past 52 weeks, STLA's PEG has been as high as 4.42 and as low as 0.74, with a median of 3.06.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. STLA has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.56.

Finally, our model also underscores that STLA has a P/CF ratio of 4.84. 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 stock's P/CF looks attractive against its industry's average P/CF of 4.93. Over the past 52 weeks, STLA's P/CF has been as high as 4.95 and as low as 1.11, with a median of 4.02.

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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