Back to top

PCAR vs. FOXF: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Automotive - Domestic sector might want to consider either Paccar (PCAR - Free Report) or Fox Factory Holding (FOXF - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Paccar and Fox Factory Holding are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 9.29, while FOXF has a forward P/E of 25.67. We also note that PCAR has a PEG ratio of 0.86. 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. FOXF currently has a PEG ratio of 1.53.

Another notable valuation metric for PCAR is its P/B ratio of 2.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FOXF has a P/B of 7.46.

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

PCAR 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 PCAR is likely the superior value option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


PACCAR Inc. (PCAR) - free report >>

Fox Factory Holding Corp. (FOXF) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in