Are Investors Undervaluing Lithia Motors (LAD) Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.One company value investors might notice is Lithia Motors (LAD). LAD is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.Another valuation metric that we should highlight is LAD's P/B ratio of 1.40. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. LAD's current P/B looks attractive when compared to its industry's average P/B of 2.30. Over the past year, LAD's P/B has been as high as 1.58 and as low as 1.02, with a median of 1.25.Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LAD has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.29.Finally, investors will want to recognize that LAD has a P/CF ratio of 8.11. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. LAD's P/CF compares to its industry's average P/CF of 10.12. LAD's P/CF has been as high as 9.19 and as low as 5.52, with a median of 6.44, all within the past year.These are only a few of the key metrics included in Lithia Motors's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LAD looks like an impressive value stock at the moment.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lithia Motors, Inc. (LAD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks