Yahoo Finance PCAR vs. TSLA: Which Stock Is the Better Value Option?
Investors with an interest in Automotive - Domestic stocks have likely encountered both Paccar (PCAR) and Tesla (TSLA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Paccar has a Zacks Rank of #2 (Buy), while Tesla has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PCAR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PCAR currently has a forward P/E ratio of 12.90, while TSLA has a forward P/E of 73.93. We also note that PCAR has a PEG ratio of 1.59. 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 3.84.
Another notable valuation metric for PCAR is its P/B ratio of 3.30. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TSLA has a P/B of 8.98.
Based on these metrics and many more, PCAR holds a Value grade of A, while TSLA has a Value grade of F.
PCAR has seen stronger estimate revision activity and sports more attractive valuation metrics than TSLA, so it seems like value investors will conclude that PCAR is the superior option right now.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
