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Are Investors Undervaluing AutoNation (AN) Right Now?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is AutoNation (AN - Free Report) . AN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.35, which compares to its industry's average of 13.44. Over the last 12 months, AN's Forward P/E has been as high as 14.25 and as low as 5.52, with a median of 10.29.
We also note that AN holds a PEG ratio of 1.11. 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. AN's industry currently sports an average PEG of 2.27. Over the past 52 weeks, AN's PEG has been as high as 4.19 and as low as 0.90, with a median of 1.24.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AN has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.47.
Finally, investors should note that AN has a P/CF ratio of 9.05. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.41. AN's P/CF has been as high as 9.20 and as low as 3.49, with a median of 6.04, 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 AutoNation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN feels like a great value stock at the moment.
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Are Investors Undervaluing AutoNation (AN) Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is AutoNation (AN - Free Report) . AN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.35, which compares to its industry's average of 13.44. Over the last 12 months, AN's Forward P/E has been as high as 14.25 and as low as 5.52, with a median of 10.29.
We also note that AN holds a PEG ratio of 1.11. 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. AN's industry currently sports an average PEG of 2.27. Over the past 52 weeks, AN's PEG has been as high as 4.19 and as low as 0.90, with a median of 1.24.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. AN has a P/S ratio of 0.37. This compares to its industry's average P/S of 0.47.
Finally, investors should note that AN has a P/CF ratio of 9.05. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.41. AN's P/CF has been as high as 9.20 and as low as 3.49, with a median of 6.04, 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 AutoNation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AN feels like a great value stock at the moment.