PCAR vs. FOXF: Which Stock Is the Better Value Option?
Investors interested in Automotive - Domestic stocks are likely familiar with Paccar (PCAR) and Fox Factory Holding (FOXF). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Paccar is sporting a Zacks Rank of #2 (Buy), while Fox Factory Holding has a Zacks Rank of #4 (Sell). This means that PCAR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PCAR currently has a forward P/E ratio of 9.93, while FOXF has a forward P/E of 19.07. We also note that PCAR has a PEG ratio of 0.99. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FOXF currently has a PEG ratio of 1.83.
Another notable valuation metric for PCAR is its P/B ratio of 2.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FOXF has a P/B of 3.32.
These metrics, and several others, help PCAR earn a Value grade of A, while FOXF has been given a Value grade of C.
PCAR sticks out from FOXF in both our Zacks Rank and Style Scores models, so value investors will likely feel that PCAR is the better option right now.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report
