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

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Investors interested in stocks from the Automotive - Domestic sector have probably already heard of Paccar (PCAR - Free Report) and Tesla (TSLA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Paccar is sporting a Zacks Rank of #2 (Buy), while Tesla has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PCAR is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PCAR currently has a forward P/E ratio of 16.77, while TSLA has a forward P/E of 176.06. We also note that PCAR has a PEG ratio of 3.55. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TSLA currently has a PEG ratio of 7.05.

Another notable valuation metric for PCAR is its P/B ratio of 2.79. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TSLA has a P/B of 13.55.

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

PCAR sticks out from TSLA in both our Zacks Rank and Style Scores models, so value investors will likely feel that PCAR is the better option right now.


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