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GM 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 General Motors Company (GM - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, General Motors Company is sporting a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GM likely has seen a stronger improvement to its earnings outlook than TSLA has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
GM currently has a forward P/E ratio of 4.96, while TSLA has a forward P/E of 47.85. We also note that GM has a PEG ratio of 0.50. 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 1.94.
Another notable valuation metric for GM is its P/B ratio of 0.62. 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. For comparison, TSLA has a P/B of 11.17.
Based on these metrics and many more, GM holds a Value grade of A, while TSLA has a Value grade of C.
GM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GM is likely the superior value option right now.
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GM or TSLA: Which Is the Better Value Stock Right Now?
Investors with an interest in Automotive - Domestic stocks have likely encountered both General Motors Company (GM - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, General Motors Company is sporting a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GM likely has seen a stronger improvement to its earnings outlook than TSLA has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
GM currently has a forward P/E ratio of 4.96, while TSLA has a forward P/E of 47.85. We also note that GM has a PEG ratio of 0.50. 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 1.94.
Another notable valuation metric for GM is its P/B ratio of 0.62. 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. For comparison, TSLA has a P/B of 11.17.
Based on these metrics and many more, GM holds a Value grade of A, while TSLA has a Value grade of C.
GM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GM is likely the superior value option right now.