PCAR or TSLA: Which Is the Better Value Stock Right Now?
Investors interested in Automotive - Domestic stocks are likely familiar with Paccar (PCAR) and Tesla (TSLA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Paccar is sporting a Zacks Rank of #2 (Buy), while Tesla has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that PCAR likely has seen a stronger improvement to its earnings outlook than TSLA has recently. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PCAR currently has a forward P/E ratio of 9.39, while TSLA has a forward P/E of 68.39. We also note that PCAR has a PEG ratio of 0.94. 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. TSLA currently has a PEG ratio of 3.43.
Another notable valuation metric for PCAR is its P/B ratio of 2.75. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TSLA has a P/B of 12.81.
These metrics, and several others, help PCAR earn a Value grade of A, while TSLA has been given a Value grade of F.
PCAR stands above TSLA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PCAR is the superior value option right now.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
