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Ally Financial (ALLY) Gains But Lags Market: What You Should Know

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Ally Financial (ALLY - Free Report) closed at $53.51 in the latest trading session, marking a +0.72% move from the prior day. This change lagged the S&P 500's 0.99% gain on the day.

Prior to today's trading, shares of the auto finance company and bank had gained 8.65% over the past month. This has outpaced the Finance sector's gain of 4.23% and the S&P 500's loss of 0.26% in that time.

ALLY will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.43, up 134.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.85 billion, up 14.7% from the year-ago period.

ALLY's full-year Zacks Consensus Estimates are calling for earnings of $5.98 per share and revenue of $7.61 billion. These results would represent year-over-year changes of +97.36% and +13.89%, respectively.

It is also important to note the recent changes to analyst estimates for ALLY. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 4.24% higher. ALLY is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, ALLY is currently trading at a Forward P/E ratio of 8.88. Its industry sports an average Forward P/E of 8.81, so we one might conclude that ALLY is trading at a premium comparatively.

The Financial - Consumer Loans industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 20, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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