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Are Investors Undervaluing CarGurus (CARG) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is CarGurus (CARG - Free Report) . CARG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.75, while its industry has an average P/E of 12.98. Over the past 52 weeks, CARG's Forward P/E has been as high as 31.92 and as low as 9.74, with a median of 17.63.
We also note that CARG holds a PEG ratio of 0.83. 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. CARG's PEG compares to its industry's average PEG of 1.04. Over the last 12 months, CARG's PEG has been as high as 4.90 and as low as 0.75, with a median of 1.36.
Investors should also recognize that CARG has a P/B ratio of 3.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.85. Over the past 12 months, CARG's P/B has been as high as 11.38 and as low as 3.26, with a median of 6.54.
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. CARG has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarGurus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CARG feels like a great value stock at the moment.
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Are Investors Undervaluing CarGurus (CARG) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
One company to watch right now is CarGurus (CARG - Free Report) . CARG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 10.75, while its industry has an average P/E of 12.98. Over the past 52 weeks, CARG's Forward P/E has been as high as 31.92 and as low as 9.74, with a median of 17.63.
We also note that CARG holds a PEG ratio of 0.83. 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. CARG's PEG compares to its industry's average PEG of 1.04. Over the last 12 months, CARG's PEG has been as high as 4.90 and as low as 0.75, with a median of 1.36.
Investors should also recognize that CARG has a P/B ratio of 3.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.85. Over the past 12 months, CARG's P/B has been as high as 11.38 and as low as 3.26, with a median of 6.54.
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. CARG has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that CarGurus is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CARG feels like a great value stock at the moment.