Are Investors Undervaluing Cars.com (CARS) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Cars.com (CARS). CARS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
Investors should also note that CARS holds 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 2.39. Over the past 52 weeks, 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 love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CARS has a P/S ratio of 0.59. This compares to its industry's average P/S of 1.28.
These are only a few of the key metrics included in Cars.com's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CARS looks like an impressive value stock at the moment.
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Cars.com Inc. (CARS) : Free Stock Analysis Report
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