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Is Mercedes-Benz Group AG (MBGAF) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Mercedes-Benz Group AG (MBGAF - Free Report) is a stock many investors are watching right now. MBGAF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.60, which compares to its industry's average of 9.78. Over the last 12 months, MBGAF's Forward P/E has been as high as 6.09 and as low as 3.90, with a median of 5.44.

Investors should also recognize that MBGAF has a P/B ratio of 0.79. 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 solid versus its industry's average P/B of 1.18. MBGAF's P/B has been as high as 0.95 and as low as 0.65, with a median of 0.85, over the past year.

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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MBGAF has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.78.

Finally, our model also underscores that MBGAF has a P/CF ratio of 3.29. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.08. Over the past 52 weeks, MBGAF's P/CF has been as high as 3.96 and as low as 1.67, with a median of 3.56.

These are just a handful of the figures considered in Mercedes-Benz Group AG's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MBGAF is an impressive value stock right now.


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