Is Cars.com (CARS) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Cars.com (CARS) is a stock many investors are watching right now. CARS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
CARS is also sporting a PEG ratio of 2.09. 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. CARS's PEG compares to its industry's average PEG of 2.42. Within the past year, CARS's PEG has been as high as 2.47 and as low as 0.74, with a median of 1.94.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CARS has a P/S ratio of 0.87. This compares to its industry's average P/S of 1.85.
Value investors will likely look at more than just these metrics, but the above data helps show that Cars.com is likely undervalued currently. And when considering the strength of its earnings outlook, CARS sticks out at as one of the market's strongest value stocks.
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Cars.com Inc. (CARS) : Free Stock Analysis Report
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