Is the Volkswagen AG (VWAGY) share currently undervalued?
The proven Zacks Rank system focuses on earnings estimates and valuation revisions to find profitable stocks. That said, we know that our readers all have their own perspectives, so we always look to the latest trends in value, growth, and momentum to find strong recommendations.
If you look at the history of these trends, perhaps none is more popular than value investing. This strategy only aims to identify companies that are undervalued by the broader market. Value investors rely on traditional forms of analyzing key valuation metrics to find stocks that they believe are undervalued and leave room for profit.
Fortunately, Zacks has developed its own style scores system to help find stocks with certain characteristics. Value investors will be interested in the “Value” category of the system. Stocks with both “A” ratings in the Value category and those with high Zacks ranks are some of the strongest value stocks on the market right now.
Volkswagen AG (VWAGY) is a stock that many investors are currently watching. VWAGY currently has a Zacks rank of # 2 (Buy) and an A for Value. The stock trades at a P / E of 10.99 compared to the industry average of 13.54. For the past 52 weeks, VWAGY’s forward P / E was 14.65 and 7.11 with a median of 9.14.
We also point out that VWAGY maintains a PEG ratio of 0.90. This metric is used in a similar way to the famous P / E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. VWAGY’s industry currently has an average PEG of 1.05. Last year, VWAGY’s PEG was 0.91 and 0.18 with a median of 0.76.
Another notable valuation metric for VWAGY is its P / E ratio of 1.28. Investors use the P / E ratio to look at the market value of a stock versus its book value, which is defined as total assets minus total liabilities. This stock’s P / E ratio looks solid versus the industry average of 1.40. VWAGY’s PER last year was 1.44 and 0.54 with a median of 0.68.
Finally, our model also underlines that VWAGY has a PER of 4.33. This data point takes into account a company’s cash flow from operations and is often used to find companies that are undervalued given their solid cash prospects. VWAGY’s current P / CF looks attractive compared to its industry average P / CF of 6.61. For the past 12 months, VWAGY’s P / E was 5.30 and 2.07 with a median of 2.70.
Value investors will likely look at more than just these metrics, but the data above shows that Volkswagen AG is likely undervalued right now. And given the strength of its earnings outlook, VWAGY stands out as one of the strongest value stocks in the market.
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Volkswagen AG (VWAGY): Free Stock Analysis Report
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