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Is Asbury Automotive Group (ABG) Stock Undervalued Right Now?

Zacks Equity Research
Tyson Foods (TSN) closed at $80.80 in the latest trading session, marking a -0.2% move from the prior day.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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.

One company to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.66. This compares to its industry's average Forward P/E of 8.88. Over the past 52 weeks, ABG's Forward P/E has been as high as 9.78 and as low as 7.37, with a median of 8.42.

Investors will also notice that ABG has a PEG ratio of 0.61. 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. ABG's PEG compares to its industry's average PEG of 1.48. Over the last 12 months, ABG's PEG has been as high as 1.09 and as low as 0.47, with a median of 0.62.

These are just a handful of the figures considered in Asbury Automotive Group'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 ABG is an impressive value stock right now.


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