Is PACCAR (PCAR) a Great Value Stock 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
PACCAR (PCAR) is a stock many investors are watching right now. PCAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.55, while its industry has an average P/E of 22.64. Over the past 52 weeks, PCAR's Forward P/E has been as high as 13.22 and as low as 10.39, with a median of 11.57.
Investors will also notice that PCAR has a PEG ratio of 1.06. 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. PCAR's industry has an average PEG of 1.68 right now. Over the past 52 weeks, PCAR's PEG has been as high as 1.32 and as low as 1.04, with a median of 1.16.
Another valuation metric that we should highlight is PCAR's P/B ratio of 2.81. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.17. Within the past 52 weeks, PCAR's P/B has been as high as 3.02 and as low as 2.20, with a median of 2.59.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PCAR has a P/S ratio of 1.27. This compares to its industry's average P/S of 2.63.
Finally, investors should note that PCAR has a P/CF ratio of 9.86. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. PCAR's P/CF compares to its industry's average P/CF of 13.71. Within the past 12 months, PCAR's P/CF has been as high as 11.06 and as low as 8.59, with a median of 10.10.
Value investors will likely look at more than just these metrics, but the above data helps show that PACCAR is likely undervalued currently. And when considering the strength of its earnings outlook, PCAR sticks out at as one of the market's strongest value stocks.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
