Investors interested in Automotive - Domestic stocks are likely familiar with Blue Bird (BLBD) and Tesla (TSLA). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Blue Bird has a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that BLBD likely has seen a stronger improvement to its earnings outlook than TSLA has recently. However, value investors will care about much more than just this.
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.
BLBD currently has a forward P/E ratio of 14.34, while TSLA has a forward P/E of 254.34. We also note that BLBD has a PEG ratio of 1.57. 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 10.63.
Another notable valuation metric for BLBD is its P/B ratio of 8.24. 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, TSLA has a P/B of 17.43.
These are just a few of the metrics contributing to BLBD's Value grade of B and TSLA's Value grade of D.
BLBD sticks out from TSLA in both our Zacks Rank and Style Scores models, so value investors will likely feel that BLBD is the better option right now.
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Blue Bird Corporation (BLBD): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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