VLVLY or RACE: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of AB Volvo (VLVLY) and Ferrari (RACE). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
AB Volvo and Ferrari are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VLVLY is likely seeing its earnings outlook improve to a greater extent. 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.
VLVLY currently has a forward P/E ratio of 10.08, while RACE has a forward P/E of 38.07. We also note that VLVLY has a PEG ratio of 0.67. 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. RACE currently has a PEG ratio of 2.20.
Another notable valuation metric for VLVLY is its P/B ratio of 2.52. 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. For comparison, RACE has a P/B of 20.57.
These metrics, and several others, help VLVLY earn a Value grade of B, while RACE has been given a Value grade of F.
VLVLY sticks out from RACE in both our Zacks Rank and Style Scores models, so value investors will likely feel that VLVLY is the better option right now.
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AB Volvo (VLVLY) : Free Stock Analysis Report
Ferrari N.V. (RACE) : Free Stock Analysis Report
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