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Ally Financial (ALLY) Outpaces Stock Market Gains: What You Should Know

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Ally Financial (ALLY) closed the most recent trading day at $43.16, moving +1.96% from the previous trading session. This change outpaced the S&P 500's 1.84% gain on the day. Elsewhere, the Dow gained 1.33%, while the tech-heavy Nasdaq added 0.67%.

Heading into today, shares of the auto finance company and bank had lost 2.89% over the past month, lagging the Finance sector's gain of 0.54% and the S&P 500's loss of 0.5% in that time.

Ally Financial will be looking to display strength as it nears its next earnings release. On that day, Ally Financial is projected to report earnings of $1.95 per share, which would represent a year-over-year decline of 16.31%. Meanwhile, our latest consensus estimate is calling for revenue of $2.22 billion, up 6.27% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.71 per share and revenue of $8.9 billion, which would represent changes of -10.45% and +8.41%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Ally Financial. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Ally Financial currently has a Zacks Rank of #3 (Hold).

Investors should also note Ally Financial's current valuation metrics, including its Forward P/E ratio of 5.49. Its industry sports an average Forward P/E of 6.39, so we one might conclude that Ally Financial is trading at a discount comparatively.

It is also worth noting that ALLY currently has a PEG ratio of 0.17. 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. The Financial - Consumer Loans industry currently had an average PEG ratio of 0.36 as of yesterday's close.

The Financial - Consumer Loans industry is part of the Finance sector. This group has a Zacks Industry Rank of 189, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ALLY in the coming trading sessions, be sure to utilize Zacks.com.


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