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HOG or TSLA: Which Is the Better Value Stock Right Now?

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Investors with an interest in Automotive - Domestic stocks have likely encountered both Harley-Davidson (HOG - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Harley-Davidson has a Zacks Rank of #2 (Buy), while Tesla has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HOG likely has seen a stronger improvement to its earnings outlook than TSLA has recently. But this is only part of the picture for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

HOG currently has a forward P/E ratio of 11.94, while TSLA has a forward P/E of 138.54. We also note that HOG has a PEG ratio of 0.49. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TSLA currently has a PEG ratio of 3.95.

Another notable valuation metric for HOG is its P/B ratio of 2.76. 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, TSLA has a P/B of 27.07.

Based on these metrics and many more, HOG holds a Value grade of A, while TSLA has a Value grade of F.

HOG has seen stronger estimate revision activity and sports more attractive valuation metrics than TSLA, so it seems like value investors will conclude that HOG is the superior option right now.


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